BEFORE THE U.S. DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Application of

AERODYNAN.nCSINCORPORATED

for a Certificate of Public Convenience and Necessity pursuant to 49 USC§ 41102 to engage in Scheduled Interstate Air Transportation of Persons, Property and Mail

Docket DOT-OST-2014-0114

SUPPLEMENT NO. 1 TO APPLICATION OF AERODYNAMICS INCORPORATED

FOR A CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY

Communications with respect to this document should be addressed to:

August 28, 2014

Aaron A. Goerlich Jason E. Maddux Garofalo Goerlich Hainbach PC 1200 New Hampshire Avenue, N.W. Suite 590 Washington, D.C. 20036-6802 202-776-3974 agoerlich@ggh-airlaw.com jmaddux@ggh-airlaw.com

Counsel for Aerodynamics Incorporated

Application of

BEFORE THE U.S. DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

AERODYNAMICS INCORPORATED Docket DOT-OST-2014-0114

for a Certificate of Public Convenience and Necessity pursuant to 49 USC§ 41102 to engage in Scheduled Interstate Air Transportation of Persons, Property and Mail

SUPPLEMENT NO. 1 TO APPLICATION OF AERODYNAMICS INCORPORATED

FOR A CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY

Aerodynamics Incorporated (ADI) hereby supplements its application dated June 25,

2014. This supplement responds to the Department's request for additional and/or clarifying

information dated August 11, 2014.

The August 11 request states at page 1 that ADI "must demonstrate it has obtained all

of the funding needed to meet our financial fitness test, or at a minimum, have a reasonable

plan for doing so." The August 11 request advises additionally that DOT has calculated ADI

will need access to slightly less than $1.2 million to meet the test.

1. ADI has in place financial resources that exceed $1.2 million by a wide margin.

These resources include a revenue guarantee of $1.2 million and pre-operating funding of

$130,000 from the Western Reserve Port Authority, and a line of credit for up to $500,000

from Far West Capital. Each resource is discussed more fully below.

Western Reserve Port Authority Revenue Guarantee: In its June 25 application in this

docket, ADI advised the Department that its initial scheduled service would operate between

the Youngstown-Warren Regional Airport (YNG) near Youngstown, Ohio, and a major

carrier's hub, and that this service would provide YNG travelers entree to the broader national

and international air transportation system - convenient access that has been absent at YN G

for over a decade. The Western Reserve Port Authority (WRPA), as owner and operator of

YNG, has been working for several years to re-establish this type of service at YNG; see

WRPA letter to DOT dated June 21, 2014, included in Attachment T to ADI's June 25

application.

WRP A's efforts have included the establishment, in coordination with the other

Youngstown Parties (see June 21 WRP A letter), of a revenue guarantee in the amount of $1.2

million to support the new service. The revenue guarantee has been incorporated in a legally

binding Airline/Airport Use and Operating Agreement between WRPA and ADI (the

Agreement). A copy of the Agreement is appended as Attachment 1 to this supplement.

In particular, ADI invites the Department's attention to Article 2.1.B, Article 6.2, and

Exhibit B of the Agreement. The terms and conditions under which the revenue guarantee

funds will be provided to ADI are set forth in these provisions. Among other things, ADI is

assured a 5% profit margin on its YNG service until the service has become self-sustaining, or

the revenue guarantee has been exhausted.

While WRP A will undoubtedly be called upon to make revenue guarantee payments

during the initial stages of the new service, the parties' objective is that the service will

become self-sustaining at a 5% or better profit margin in less than a year. 1 In the event it does

not become self-sustaining in that time frame, the revenue guarantee will continue to be

ADI projects that revenue guarantee payments totaling approximately $860,000 will be required over the initial nine months of the service before sustainability is achieved. See Attachment T to ADI's June 25 application, page 3.

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available until exhausted. Should that occur, ADI may then elect to continue or discontinue

the service.

Under the Agreement, ADI is free to obtain revenue guarantee disbursements on

whatever timetable it establishes (except that the Agreement provides ADI will do so no less

frequently than monthly). For each disbursement, the Agreement requires ADI to submit to

WRP A an invoice accompanied by an explanatory accounting of the profit/loss margin during

the period in question, as determined in accordance with Generally Accepted Accounting

Principles (GAAP) established by the Financial Accounting Standards Board?

Pre-operating Funding: WRPA will provide $130,000 to ADI to defray ADI's pre­

operating expenses associated with its establishment of scheduled airline service at YNG. In

this regard, ADI invites the Department's attention to Articles 2.l.A and 6.1 of the

Agreement. These funds will be furnished to ADI upon WRPA's public announcement of the

initial scheduled passenger service to be operated by ADI at YNG, which will be made

sufficiently in advance of service inauguration to allow for reasonably effective marketing

and sales activities prior to the first flight.

Far West Capital Line of Credit: In addition to the above resources, ADI continues to

have available a line of credit from Far West Capital for up to $500,000. Information on this

resource is available in Attachment T to ADI's June 25 application.

2. As evidence of WRPA's ability to deliver on the fmancial commitments

undertaken in the Agreement, WRP A has furnished the following information:

2 As noted in WRPA's June 21 letter to DOT included in Attachment T to ADI's application, WRP A will be entitled to apply under a SCASD grant for reimbursement of 65% of each disbursement, subject to an overall cap of $780,000. This, however, has no bearing on WRPA's obligation to provide funding to ADI under the revenue guarantee; see Article 6.3.B of the Agreement.

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Bank Statements: Appended as Attachment 2 are statements from two WRPA bank

accounts showing a total of over $1.6 million on deposit as of July 31, 2014. The average

balances shown on the statements likewise exceed $1.6 million in total.

Financial Statements: Appended as Attachment 3 is a WRPA financial statement for

January through July 2014. During this seven-month period, WRPA's total cash receipts

came to $2,135,669, while its total cash disbursements were $2,092,596.

Also included in Attachment 3 is WRPA's financial report and management analysis

for calendar year 2012.3 This document is included primarily to provide the Department an

overview ofWRPA's scope, finances, and accounting policies and procedures.

It is important to understand that WRP A is a public agency created over 20 years ago

by Mahoning and Trumbull Counties, Ohio, for the purpose of assuming ownership of and

operational responsibility for YNG. Over the years WRPA has evolved into a dynamic,

multi-faceted agency dedicated to promoting growth and economic development in the region

and having the ability to access multiple financing, funding and incentive programs offered by

local, state and federal agencies.4 As such, the financial support WRPA will provide for

ADI's service at YNG is fully consistent with WRPA's mission.

Asset Valuations: Appended as Attachment 4 is an appraisal of WRP A's buildings

and equipment at YNG as of July 1, 2013. This document was prepared by an independent

appraisal company as required in conjunction with the insurance protection carried by WRP A.

The appraisal sets the collective value of YNG's terminal building, several hangars, other

3 A similar document for 2013 should be available in November 2014, upon completion of WRPA's calendar year 2013 audit, which begins next month, and preparation of the report and analysis.

4 Source: WRPA website (westernreserveportauthority.com/about-us). Note additionally that under Ohio law, WRP A can exercise broad authority in furtherance of its authorized purposes, including issuance of revenue bonds and voted general obligation bonds. Source: WRP A website ( westernreserveportauthority .com/about-us/statutory-authority).

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buildings, glycol (deicing) system, runway lighting, and property-in-the-open at

approximately $22.5 million. This, of course, does not take account of substantial non­

aviation WRP A assets located elsewhere.

The upshot of the WRP A bank statements, financial statements and asset valuations is

that WRP A is a long-standing and substantial organization with a sound financial foundation.

The Department need not be concerned about WRPA's ability to deliver on its commitments

under the Agreement.

• • •

WHEREFORE, ADI renews its request that the Department issue to Aerodynamics

Incorporated a certificate of public convenience and necessity to engage in scheduled

interstate air transportation of persons, property and mail. ADI also renews its request that the

Department complete its processes in this matter as expeditiously as possible.

August 28, 2014

Respectfully submitted,

,4_ tl. cf(JvZ_ r6-~

Aaron A. Goerlich Jason E. Maddux Garofalo Goerlich Hainbach PC

Counsel for Aerodynamics Incorporated

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CERTIFICATION

Pursuant to title 18 United States Code section 1001, I, Scott A. Beale, in my individual

capacity and as the authorized representative of Aerodynamics Incorporated, have not in any

manner knowingly and willfully falsified, concealed or covered up any material fact or made

any false, fictitious, or fraudulent statement or knowingly used any documents which contain

such statements in connection with the preparation, filing or prosecution of the application. I

understand that an individual who is found to have violated the provisions of 18 U.S.C.

section 1001 shall be fined nor more than $10,000 or imprisoned not more than five years, or

both.

Scott A. Beale, Chief Executive Officer Aerodynamics Incorporated

Dated: August 27, 2014

ATTACHMENT 1

WESTERN RESERVE PORT AUTHORITY

AIRLINE I AIRPORT USE AND OPERATING AGREEMENT

BETWEEN

THE YOUNGSTOWN-WARREN REGIONAL AIRPORT

AND

AERODYNAMICS IN CORPORA TED

TABLE OF CONTENTS

AIRLINE I AIRPORT USE & OPERATING AGREEMENT

Article I - Definitions

Article II- Term

Article III - Premises

Article IV - Uses, Rights and Privileges

Article V - Fees and Charges

Article VI- Airline Operational Start-Up and Revenue Guarantee Funding

Article VII - Maintenance and Operation of the Airport

Article VIII - Indemnification and Insurance

Article IX - General Provisions

EXHIBIT A - PREMISES

EXHIBIT B -AIR SERVICE PLAN

EXHIBIT C- AIRPORT RATES & CHARGES

EXHIBIT D- GROUND HANDLING PROPOSAL

EXHIBIT E- MARKETING & ADVERTISING PLAN

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AIRLINE I AIRPORT USE AND OPERATING AGREEMENT

THIS SIGNATORY AIRLINE I AIRPORT USE & OPERATING AGREEMENT, is made and entered into this 25th day of August, 2014, by and between the WESTERN RESERVE PORT AUTHORITY (the "Authority") and AERODYNAMICS INCORPORATED, a Michigan corporation ("ADI or Airline");

WITNESSETH:

WHEREAS, pursuant to Chapter 4582, Ohio Revised Code, the Authority is engaged in the operation of an airport located in the County of Trumbull, State of Ohio, and known as the Youngstown-Warren Regional Airport; and

WHEREAS, under the laws of the State of Ohio, Authority has jurisdiction, control, supervision and management over the Airport and has the jurisdiction to fix, alter, charge, establish, and collect rates, fees, and other charges for service and facilities of the Airport; and

WHEREAS, Airline desires to use certain facilities of the Airport for the purpose of providing commercial air transportation to the public, and is willing to enter into this Airline I Airport Use and Operating Agreement ("the Agreement") and has agreed to pay fees and charges therefor as may be reasonably established by Authority from time to time; and

WHEREAS, it is in the mutual best interest of the parties hereto to enter into this Agreement;

NOW, THEREFORE, in consideration of the above recitals that are incorporated herein by reference, the parties mutually undertake, promise and agree as follows:

Article I- DEFINITIONS

1.1 Definitions

A. In addition to any other words or terms that may be defined elsewhere herein, the following words and terms used in this agreement shall have the following meanings unless some other meaning is plainly intended:

1. "Airline" or "ADI" means AERODYNAMICS IN CORPORA TED, a corporation organized and existing by virtue of the laws of the State of Michigan and an air carrier certificated by the U.S. Department of Transportation (DOT) and Federal Aviation Administration (FAA).

2. "Airport" shall mean the Youngstown-Warren Regional Airport, including any extensions, additions, or improvements thereto.

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3. "Airfield Area" shall mean the runways, taxiways, approach and clear zones, infield areas, navigational aids, and other facilities related to aircraft taxiing, landing, and takeoff.

4. "Air Operations Area" shall have the meaning set forth m the Regulations.

5. "Authority" shall mean the Western Reserve Port Authority of the State of Ohio or any successor thereto or its representative.

6. "Certificated Weight" of an aircraft shall mean its current maximum allowable gross landing weight, rounded to the nearest 1 ,000 pound unit and expressed in 1 ,000 pound units, at the Airport as operated by Airline and certificated by FAA.

7. "Commercial Aircraft Operator" shall have the meaning set forth in the Regulations.

8. "Common Use" shall mean the use of space in common with other airlines.

9. "Emergency Landing" shall mean any landing of an aircraft which after having taken off from the Airport, and without landing at any other airport, shall return to land at the Airport because of weather conditions, mechanical or operating failure or causes, or for any other reason of caution or emergency.

10. "Enplaned Passengers" shall mean all local boarding, interline transfer, and intraline transfer passengers at the Airport.

11. "FAA" shall mean the Federal Aviation Administration of the United States Department of Transportation, or its successor agency or its representative.

12. "Ground Handling Agent" shall mean the entity designated by Airline to ground handle Airline's aircraft, passengers, baggage, ticketing and other ground operations of Airline as set forth in a separate agreement that has been approved by Authority.

13. "Regulations" shall mean those regulations promulgated by Authority pursuant to Chapter 4582 ORC, as the same may be amended, modified, or supplemented from time to time.

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14. "Revenue Landing" shall mean an aircraft landing at the Airport by any aircraft of Airline other than an Emergency Landing.

15. "Terminal Apron Area" shall mean the aircraft parking ramp and apron adjacent to the Tenninal Building.

16. "Terminal Building" shall mean the Airport terminal structure(s), areas and facilities that are provided by Authority for the ticketing, baggage handling, processing of passengers and airline operations at the Airport.

17. "Youngstown Parties" shall mean collectively the Authority, the Airport, Mahoning County, Trumbull County, various private-sector corporations/businesses, and YNGAir Partners, a non-profit organization providing community-based support for the Airport.

Article II - TERM

2.1 Effective Date

This Agreement shall become effective October 1, 2014 ("Effective Date"), except as follows:

A. A vail ability to Airline of the Start-Up Operational Funding described in Article 6.1 of this Agreement shall become effective upon public announcement by the Authority of the initial scheduled passenger service to be operated by Airline at Airport, which announcement shall not be unreasonably withheld or delayed.

B. Availability to Airline of the Revenue Guarantee described in Article 6.2 of this Agreement shall become effective upon Airline's inauguration of scheduled passenger service at the Airport.

2.2 Term

A. All rights and privileges granted to Airline by this Agreement for the use of any premises, space, area, buildings, structures, improvements or facilities at or on the Airport, or with respect to or as an incident to the use thereof, whether granted in the form of a license or otherwise, are granted for a period of two (2) years commencing on the Effective Date until tenninated by either party for any reason, with cause, upon not less than ninety (90) days written notice to the other party.

B. The continued use of the Airport by Airline after the expiration date hereof shall not result in the automatic renewal of this Agreement nor shall Authority's permission to such continued use operate to extend the term of this Agreement unless specifically agreed to in writing; provided that in the event of such continued use, the terms and conditions of this Agreement shall continue to apply until superseded by a new

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agreement. Any such new agreement shall incorporate the discounted Landing Fee Rates specified in Article 5.3.A.1 ofthis Agreement.

Article III- PREMISES (As depicted in Exhibit A.)

3.1 Baggage Claim

A. Airline may use Common Use baggage claim m the Tenninal Building.

3.2 Apron, Parking Positions, Passenger Boarding Bridge and Holdroom

Airline may use apron, parking positions and Passenger Boarding Bridge and holdroom areas associated with Gate 6. Airline shall use other apron, parking position and hold room facilities as approved by Authority for negotiated fees.

3.3 Airline Ticket Counter, Operations Offices and other Space.

Airline may use ticket counter, offices and other space associated with Gate 6. Airline shall use other ticket counter, offices and other space as approved by Authority for negotiated fees.

Article IV- USES, RIGHTS AND PRIVILEGES

4.1 Rights of Airline

A. Authority hereby grants to Airline the non-exclusive right to use the Airfield Area, the Tenninal Apron Area, and the Premises described in Article III above in common with others, which use, without limiting the generality hereof, shall include:

1. The operation of a transportation system by aircraft for the carriage of persons, property, baggage, cargo, express and mail, including, but without limiting the generality hereof, courtesy, test, and training uses between the hours of 5 A.M. and 11 P.M. local time.

2. FAR Part 121 Scheduled Air Carrier Passenger Service to a Network Airline hub destination (and to such additional destinations as Airline may decide to serve at a later date) as described in Exhibit B.

3. Posting such notices to passengers as are required by federal laws or regulations, to the extent such notices are not already posted at required locations.

4. Support of the Authority's efforts toward the Youngstown-Warren Regional Airport's application to re-establish PFC imposition for

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·'approved'' PFC projects of which Airline will have the opportunity to review and comment on as part of the approval process.

5. The repairing, maintaining, conditioning, servicing, testing, parking or storage of Airline's owned or leased aircraft and ancillary equipment owned, leased or operated by Airline, provided that such right shall not be construed as authorizing the conduct of a separate business by Airline, but shall permit Airline to perform such functions as are incidental to the conduct of its own air transportation system. The activities authorized by this Paragraph 4.1.A.5 shall be conducted only in areas designated by Authority.

6. The hiring and training on the Airport of personnel in the employ of or on contract with, or to be employed or contracted by, Airline.

7. The servicing by Airline, or by others of Airline's choice, of Airline's aircraft and other equipment by truck or otherwise, with gasoline, fuel or other propellants, oil, greases, lubricants, or other supplies, including foods and beverages required by Airline; except that nothing herein shall be deemed to grant others the right to do business on the Airport without the prior approval of Authority, which approval shall not be withheld unreasonably.

8. The landing, taking off, flying, taxiing, towing, loading or unloading, of Airline's aircraft.

9. The loading and unloading of property, cargo, express and mail at the Airport by motor vehicles or other manner of conveyance as Airline may desire or require in the operation of its own air transportation system, with the right to designate the particular ground carrier or carriers who should regularly transport Airline's property, cargo, express and mail to and from the Airport.

10. The right and privilege of Airline, its agents, suppliers, employees, contractors, passengers, guests, and invitees, of access to the public areas and public facilities of the Terminal Building. Airline shall not authorize, or permit, the use of said access by any person or firm engaged in any activity that, or which performs any act, or furnishes any service, for or on behalf of Airline that, Airline is not authorized to engage in or perform under the provisions of this Agreement, unless expressly authorized by Authority. Authority shall have the right at any time or times to close, relocate, reconstruct, change, alter, or modify any such means of access provided for Airline's use pursuant to this Agreement, or otherwise, either temporarily or permanently; provided that Authority shall give reasonable notice to Airline of said intent and

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shall provide a reasonably convenient and adequate alternative means of access in lieu thereof. Authority shall suffer no liability by reason thereof and such action shall in no way alter or affect any of Airline's obligations under this Agreement.

11. The Authmity's approved FBO, Winner Aviation, experienced in the above and below wing ground handling of commercial service airline operations, shall be available to provide competitive Ground Handling Services to the Airline. A Proposed Winner Aviation Ground Handling Agreement to ADI is depicted in Exhibit D.

12. All abatements, revenue guarantees, and in-kind services programs are shown in Exhibit C.

13. The Fly YNG- ADI Marketing & Advertising Plan is depicted in Exhibit E.

4.2 Provision and Sale of Goods and Services

A Authority expressly waives the right to assess and collect fees for inflight catering, vending, ground transportation for employees, and other services provided by Airline for its own use; provided, however, that if such services are provided by Airline to others for profit, or if Airline has such services provided by others, Authority reserves the right to charge reasonable fees therefore.

B. Except as specifically provided for in this Article IV, nothing herein shall be deemed to give Airline any right or permission to sell or provide any goods or

services at the Airport not incidental to its own air transportation system. Airline may have said services provided for it by such company or companies, or through a nominee, of its choice, provided that said company, companies or nominee is authorized by Authority to conduct such service(s) on the Airport, and further provided that such company, companies or nominee shall have no greater rights than Airline hereunder.

4.3 Ground Handling Agreement

If Airline agrees to ground handle any portion of the operations of another scheduled or un-scheduled airline, or if another airline or private ground handling agency agrees to ground handle any portion of the operations of Airline, Airline shall provide Authority advance written notice of such proposed activities, including a description of the type and extent of services to be provided. Airline shall not agree to ground handle another airline if such airline does not have in force an operating agreement with Authority.

Article V- FEES AND CHARGES

5.1 General

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In return for use of the Tenninal Building and Airport facilities, and for the rights and privileges granted hereunder, Airline agrees to provide certain infonnation to Authority and to pay Authority, without deduction or setoff, during the tenn of this Agreement certain fees and charges as set forth in this Article V and Exhibit C, Authority"s Leasing, Rates & Charges Policy, Airport Rates & Charges Schedule.

5.2 Monthly Reports

A. Airline shall furnish to Authority on or before the 15th day of each month, an accurate report of Airline's operations at the Airport during the preceding month, setting forth all data reasonably necessary to calculate the fees and charges due under this Agreement. Said report shall include: (1) Airline's total number of Revenue Landings for the month by type of aircraft, the Certificated Weight of each Aircraft, and the Total Landing Weight for the month; (2) the total number of Airline's enplaning and deplaning passengers; and (3) Airline's amount of cargo, freight, mail, and express arriving and departing the Airport by both air and ground transport, each mode (air and ground) to be reported separately for such month.

B. Airline shall furnish to Authority on or before the 15th day of each month an accurate report of Airline's planned operations at the Airport for the succeeding month. Said report shall include, for each flight scheduled to operate at the Airport at any time during the succeeding month: (1) flight number; (2) aircraft equipment types; (3) days of week which the flight will operate; (4) scheduled local arrival and/or departure time at the Airport; (5) complete itinerary including scheduled local arrival and/or departure time at each airport serviced; and (6) the effective and termination date during said month. In addition, Airline shall furnish to Authority the total number of seats in each type of aircraft operated by Airline at the Airport and shall, from time to time, upon the request of Authority, provide current seating capacity of those various types of aircraft.

5.3 Landing Fee

A. Airline shall, without invoice from Authority and not later than the 15th day of the following month, pay Authority for Revenue Landings made by Airline in the previous month at the greater of:

1. The Landing Fee Rate is determined to be $1.29 per unit of Aircraft Maximum Landing Weight and is calculated by multiplying the number of 1 ,000-pound units of Total Maximum Gross Landing Weight of Airline Aircraft during the month by the "Landing Fee Rate" as such may be amended; provided, in the case of Airline, Landing Fees are WAIVED THROUGHOUT THE TWO-YEAR PERIOD COMMENCING ON THE DATE OF AIRLINE'S INAUGURATION OF SCHEDULED PASSENGER SERVICE AT AIRPORT, then charged at a rate of$0.99 per 1,000 lbs. through the fourth anniversary of Airline's inauguration of scheduled passenger service at Aimort, then charged per Exhibit C, the Airport Rates & Charges Schedule;

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B. Documentation for Airline's calculation in subparagraph 5.3.A shall be provided with Airline's payment. Acceptance by Authority of any payment shall not preclude Authority from verifying the accuracy of Airline's calculation, or from recovering or refunding any differences established by Authority.

C. If Airline fails to furnish Authority with the report required by Paragraph 5.3.A, payments as required by Paragraph 5.3 shall be detennined by assuming that Airline's Total Landing Weight for such month(s) that the report is not submitted is equal to that of the most recent month for which such data are available for Airline. Any necessary adjustment in such Landing Fee shall be calculated after an accurate report is delivered to Authority by Airline for the month in question, and resulting surpluses or deficits shall be applied as credits or charges to the appropriate invoices in the next succeeding month.

5.4 Premises Fees

A. Apron and Holdroom. WAIVED THROUGHOUT THE TWO­YEAR PERIOD COMMENCING ON THE DATE OF AIRLINE'S INAUGURATION OF SCHEDULED PASSENGER SERVICE AT AIRPORT, then per Exhibit C, the Airport Rates & Charges Schedule;

B. Baggage Claim Area. WAIVED THROUGHOUT THE TWO­YEAR PERIOD COMMENCING ON THE DATE OF AIRLINE'S INAUGURATION OF SCHEDULED PASSENGER SERVICE AT AIRPORT, then per Exhibit C, the Airport Rates & Charges Schedule;

C. Ticket Counter, Operating Office, Other Space. WAIVED THROUGHOUT THE TWO-YEAR PERIOD COMMENCING ON THE DATE OF AIRLINE'S INAUGURATION OF SCHEDULED PASSENGER SERVICE AT AIRPORT, then per Exhibit C, the Airport Rates & Charges Schedule;

D. Passenger Boarding Bridge Fee. WAIVED THROUGHOUT THE TWO-YEAR PERIOD COMMENCING ON THE DATE OF AIRLINE'S INAUGURATION OF SCHEDULED PASSENGER SERVICE AT AIRPORT, then per Exhibit C, the Airport Rates & Charges Schedule;

E. RON Fee. WAIVED THROUGHOUT THE TWO-YEAR PERIOD COMMENCING ON THE DATE OF AIRLINE'S INAUGURATION OF SCHEDULED PASSENGER SERVICE AT AIRPORT, then per Exhibit C, the Airport Rates & Charges Schedule;

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F. Airport Security and Use Fee. WAIVED THROUGHOUT THE TWO-YEAR PERIOD COMMENCING ON THE DATE OF AIRLINE'S INAUGURATION OF SCHEDULED PASSENGER SERVICE AT AIRPORT, provided there shall be an Airport Use fee of $0.50 per enplaned passenger through the second anniversary of Airline's inauguration of scheduled passenger service at Airport, then per Exhibit C, the Airport Rates & Charges Schedule;

G. Passenger Facility Charge (PFC). Throughout any period during which PFCs are in effect at Airport, Airline shall collect from passengers scheduled to enplane at Airport and pay over to Airport (less the amount Airline is authorized by 14 CFR 158.53 to retain) PFCs at a rate of $4.50 per enplaned passenger, as such may be amended with consent of Airline;

H. Rents and fees for any use of Airport premises not provided in this Agreement shall be at the rates provided in Exhibit C, the Airport Rates & Charges Schedule, as such may be amended.

5.5 Payment Due

All Premises Fees shall be due and payable in advance on the first day of each month without invoice. Landing Fees shall be due and payable without invoice on the 15th day of the month following the month to which the Landing Fees apply. Any payment not received on or before the due date shall accrue interest, at the rate of 1.5% per month, from said due date until paid in full. PFCs shall be remitted as set forth in Part 158 of the FAA regulations, 14 CFR Part 158.

Article VI- AIRLINE OPERATIONAL START -UP AND REVENUE GUARANTEE FUNDING

6.1 Start-up Operational Funding.

The Authority, on behalf of itself and the Youngstown Parties, shall provide $130,000 to Airline upon public announcement by the Authority of the initial scheduled passenger service to be operated by Airline at Airport, which announcement shall not be unreasonably withheld or delayed. These funds shall constitute initial start-up funding to defray the pre-operating expenses Airline must incur to establish and operate the air service from the Youngstown-Warren Regional Airport contemplated by this Agreement.

6.2 Revenue Guarantee.

The Authority, on behalf of itself and the Youngstown Parties, shall provide up to $1,200,000 to Airline as a revenue guarantee, effective from the date of Airline's inauguration of scheduled passenger service at Airport and

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continuing until the second anniversary of such service; provided, that in the event the total amount paid to Airline under the revenue guarantee reaches $1,200,000 prior to such second anniversary, the revenue guarantee shall thereupon tenninate automatically. The purpose of the revenue guarantee is to provide the Airline assurance that throughout the initial two years (or such lesser period as may be the case) of its service at the Airport, the Airline will achieve a profit margin of not less than five percent (5%) on the service contemplated by this Agreement. No less frequently than monthly, Airline shall provide a written accounting to Authority detailing the profit margin achieved by Airline on its service to and from the Airport during the period covered by the accounting. To the extent a loss or a profit margin of less than 5% has resulted during the period in question, such accounting shall include an invoice issued by Airline. Upon receipt of such accounting and invoice, the Authority shall, without delay, issue a revenue guarantee payment to Airline in an amount sufficient to cover the difference between the profit margin (or loss, as the case may be) achieved and a 5% profit margin, which shall be the amount invoiced by Airline. Additional details of the revenue guarantee are set forth in Exhibit B.

6.3 Mutual Acknowledgments.

A. The Authority acknowledges that in entering into this Agreement, Airline is relying upon all of the financial considerations set forth in Articles V and VI of this Agreement, and that Airline would not enter into this Agreement in the absence of such considerations.

B. Airline acknowledges that the Authority is free to apply for federal reimbursement of eligible expenses the Authority incurs (including but not limited to revenue guarantee expenses) in relation to the establishment and continuation of Airline's service to and from the Airport, to the extent such reimbursement is available to the Authority under a Small Community Air Service Development (SCASD) grant issued by DOT in August 2012. The Authority acknowledges that its obligation to provide to Airline the financial considerations set forth in Articles V and VI of this Agreement is independent of (i) the amount of SCASD funding available to the Authority, and (ii) whether the Authority is successful in obtaining reimbursements under the SCASD grant.

Article VII - MAINTENANCE AND OPERATION OF THE AIRPORT

7.1 Authority Obligations

Authority agrees that it will develop, improve, maintain and operate the Airport, including the Terminal Building and all appurtenances, facilities, now or hereafter connected therewith as the same relate to Airline's air transportation system, and will keep the Airport and its aerial approaches free from obstruction and interference for the safe and proper use thereof by Airline, all in a manner at least equal to the standards established by

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the FAA and any other governmental agency having jurisdiction thereof, except for conditions beyond the control of Authority.

7.2 Airline Obligations

Airline shall perfonn, at its sole expense, ordinary preventive maintenance and ordinary upkeep and repair of all owned facilities, personal property and equipment located on the Airport. Airline shall maintain all Airport facilities used by Airline hereunder in a neat, clean, and orderly condition, free from litter, debris, refuse, petroleum products, or grease that may result from activities of its passengers, employees, agents, or suppliers. Airline shall promptly remove all oil and grease spillage which is attributable to Airline's aircraft or equipment and shall not pennit any prohibited substance to enter the sewer system. No equipment shall be parked on the ramp except in areas specifically designated by Authority.

Article VIII- INDEMNIFICATION AND INSURANCE

8.1 Indemnification and Insurance

A. Airline agrees to indemnify and save Authority, its officers, agents, and employees hannless from any liability, including, but not limited to, claims, judgments, fines, costs, and reasonable attorneys' fees, for death or injury to persons or damage to property resulting from or arising out of the use or occupancy of the Airport by Airline, its agents and employees, or caused by or resulting from the exercise of the rights and privileges granted hereunder, to the extent that said claims, judgments, fines, costs or reasonable attorney's fees result from the negligence or willful misconduct of Airline, its agents or employees; and further agrees to carry, and furnish to Authority a certificate(s) of insurance, with combined single limits not less than the following, if Airline operates:

Aircraft with less than 1 0 seats, Aircraft with 1 0 seats, but less than 25 seats, Aircraft with 25 seats or more,

or Aircraft with a maximum gross landing weight

ofless than 15,000 lbs., Aircraft with a maximum gross landing weight

of 15,000 lbs., but less than 35,000 lbs., Aircraft with a maximum gross landing weight

of35,000 lbs. or more,

$ 25,000,000; $ 50,000,000; $1 00,000,000;

$ 25,000,000;

$ 50,000,000;

$1 00,000,000;

whichever is the greater, it being agreed that Airline shall provide such insurance in the limits prescribed for the aircraft operated by Airline having the greatest numbers of seats or the greatest maximum gross landing weight, regardless of the composition of Airline's aircraft fleet; which insurance shall provide coverage for public liability, property damage, bodily injury in which Authority shall be an additional insured to the extent of the liability

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assumed by Airline hereunder. If Airline operates licensed or unlicensed vehicles in the Air Operations Area, Airline shall provide insurance coverage for such vehicles in the same minimum limit(s) as required above in this subparagraph 8.1.A. Airline shall furnish satisfactory evidence that such insurance is in effect and will not be canceled during the tenn of this Agreement without thirty (30) days' prior written notice of such cancellation to Authority. Airline shall carry Worker's Compensation and Employers Liability Insurance covering its employees employed at the Airport.

B. In conducting its business hereunder, Airline acts as an independent contractor and not as an agent of Authority. The selection, retention, assignment, direction, and payment of Airline's employees shall be the sole responsibility of Airline. Authority shall not attempt to exercise any control over the daily performance of duties by Airline's employees, except to the extent and in the manner required by law or regulation for continued operation or certification of the Airport.

8.2 Nonliability of Authority

Authority shall not be liable to Airline or its agents, representatives or employees, for any injury or damage either to person or property, due to the Airport or any improvements thereon or any part thereof or any appurtenances thereof becoming out of repair, or due to the happening of any accident in or about the Airport, except to the extent that such injury, damage or accident results from the negligence or willful misconduct of Authority, its agents or employees; nor shall Authority be liable to Airline or its agents, representatives or employees, for any injury or damage either to person or property, due to any act or neglect of any tenant or occupant of the Airport, or of any other person. Without limiting the generality of the foregoing, in the absence of the negligence or willful misconduct of Authority, its agents or employees, Authority shall not be liable for damage caused by water, steam, sewerage, gas, bursting or leaking of pipes or plumbing or electrical causes, or the negligence of contractors, their employees or agents, or licensees of Authority.

8.3 If Airline uses Tenninal Building exterior Passenger Boarding Bridge for its enplaning and deplaning passengers (the "Passenger Boarding Bridge"), in consideration thereof, and in addition to and not as substitution for the indemnification provided by Airline to Authority pursuant to Paragraph 8.1 above, Airline, in the absence of the negligence or willful misconduct of Authority, its agents or employees, shall assume responsibility for loss or damage to property or injury to persons resulting from, arising out of, or associated with the use of the Passenger Boarding Bridge, as well as for any claims made by or on behalf of Airline's agents, servants, and employees, arising from their employment or work and which results from the use of the Passenger Boarding Bridge. Airline shall at all times agree to indemnify and hold Authority and its officers, agents and employees harmless from and against any and all liabilities, demands, claims, suits, losses, damages, causes of action, fines or judgments, including those reasonable and necessary costs, reasonable attorney and witness fees, and expenses incidental thereto, arising out of, or in connection with, the use of the Passenger Boarding Bridge, except for acts arising from the negligence or willful misconduct of Authority, its agents or employees.

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Article IX- GENERAL PROVISIONS

9.1 Regulations

A. Airline shall observe and obey all lawful Regulations promulgated, from time to time during the term hereof, by Authority governing conduct on, and operations at, the Airport and use of Authority's facilities. Copies of the Regulations, as adopted or amended, shall be forwarded to Airline. Authority agrees that Regulations so promulgated shall not alter the tenns of this Agreement, or be inconsistent with any rule or regulation of the DOT, FAA, TSA, or any other federal or State agency, which is binding in law on Airline or Authority, as the same now are or may from time to time be amended or supplemented.

B. Airline shall not violate, nor knowingly pennit its agents, contractors, or employees acting on Airline's behalf to violate, any such Regulations.

C. Airline shall have the right to lawfully contest the validity of any rule or Regulation promulgated by Authority.

9.2 Compliance with Laws

A. Airline shall not use the Airport or any part thereof, or permit the same to be used by any of its employees, officers, agents, subtenants, invitees, or licensees, for any illegal purposes and shall, at all times during the tenn of this Agreement, comply with all applicable ordinances and laws of any City, County, or State government or of the United States Government, and of any political division or subdivision or agency or commission thereof which may have jurisdiction to pass laws or ordinances or to make and enforce rules or regulations with respect to the uses hereunder.

9.3 Use of the Airport by Airline

A. Airline shall not do, nor shall it permit anyone over which it exercises control to do, anything at or about the Airport which may interfere with the effectiveness or accessibility of the drainage and sewage system, fire protection system, sprinkler system, alarm system, fire hydrants and hoses, if any, installed or located on the Airport.

B. Airline shall not do, nor shall it permit anyone over which it exercises control to do, any act or thing upon the Airport which will invalidate, conflict with or increase the premium on any fire or other casualty insurance policies covering the Airport or any part thereof.

C. Airline shall not dispose of, nor shall it permit any other person over which it exercises control to dispose of, any waste material (whether liquid or solid) taken

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from, or products (whether liquid or solid) used with respect to, its aircraft into the sanitary or stonn sewers at the Airport unless such waste material or products shall first be properly treated by equipment installed with the approval of Authority for that purpose.

9.4 Nondiscrimination

A. During the perfonnance of this Agreement, Airline, for itself, its assignees and successors in interest agrees as follows:

I. Compliance with Part 21. Airline shall comply with the regulations relative to nondiscrimination in federally assisted programs of the Department of Transportation (hereinafter "DOT") Title 49, Code of Federal Regulations, Part 21, as they may be amended from time to time (hereinafter referred to as Part 21 ), which are herein incorporated by reference and made a part of this Agreement.

2. Nondiscrimination. Airline, with regard to the work perfonned by it during the Agreement, shall not discriminate on the grounds of race, color, national origin, sex or creed in the selection and retention of subcontractors, including procurements of materials and leases of equipment. Airline shall not participate either directly or indirectly in the discrimination prohibited by section 21.5 of Part 21, including employment practices when the Agreement covers a program set forth in Appendix B of Part 21.

3. Solicitation for Subcontracts, Including Procurements of Materials and Equipment. In all solicitations either by competitive bidding or negotiation made by Airline for work to be performed under a subcontract, including procurements of materials or leases of equipment, each potential subcontractor or supplier shall be notified by Airline of Airline's obligations under the Agreement and Part 21 relative to nondiscrimination on the grounds of race, color, national origin, sex or creed.

4. Information and Reports. Airline shall provide all information and reports required by Part 21 or directives issued pursuant thereto and shall permit access to its books, records, accounts, other sources of information and its facilities as may be determined by the Authority and the FAA to be pertinent to ascertain compliance with Part 21, orders and instructions. Where any information required of Airline is in the exclusive possession of another who fails or refuses to furnish this information, Airline shall so certifY to the Authority or the FAA, as appropriate, and shall set forth what efforts it has made to obtain the information.

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5. Sanctions for Noncompliance. In the event of Airline's noncompliance with the nondiscrimination provisions of this Agreement, the Authority shall impose such contract sanctions as it or the FAA may detennine to be appropriate, including, but not limited to:

a. Withholding of payments to Airline under the Agreement until Airline complies, and/or

b. Cancellation, tennination, or suspensiOn of the Agreement, in whole or in part.

6. Incmnoration of Provisions. Airline shall include the provisions of paragraphs 1. through 5. in every subcontract, including procurements of materials and leases of equipment, unless exempt by Part 21 or directives issued pursuant thereto. Airline shall take such action with respect to any subcontract or procurement as the Authority or the FAA may direct as a means of enforcing such provisions including sanctions for noncompliance. Provided, however, that in the event Airline becomes involved in, or are threatened with, litigation with a subcontractor or supplier as a result of such direction, Airline may request the Authority to enter into such litigation to protect the interests of the Authority and, in addition, Airline may request the United States to enter into such litigation to protect the interests of the United States.

C. Inasmuch as applicable law requires, notwithstanding any other or inconsistent provision of this Agreement, during the term of this Agreement, Airline agrees as follows: Airline assures that it will comply with pertinent statutes, Executive Orders and such rules as are promulgated to assure that no person shall, on the grounds of race, creed, color, national origin, sex, age, or handicap be excluded from participating in any activity conducted with or benefiting from Federal assistance. This provision obligates Airline or its transferee for the period during which Federal assistance is extended to the airport program, except where Federal assistance is to provide, or is in the form of personal property or real property or interest therein or structures or improvements thereon. In these cases, the provision obligates the party or any transferee for the longer of the following periods: (a) the period during which the property is used by Authority or any transferee for a purpose for which Federal assistance is extended, or for another purpose involving the provision of similar services or benefits; or (b) the period during which Authority or any transferee retains ownership or possession of the property. Airline further assures that this provision shall be inserted in all contracts, subcontracts, and other agreements at all tiers.

D. That in the event of breach of any of the above, nondiscrimination covenants, Authority shall have the right to terminate this Agreement and to reenter and repossess the Premises and the facilities thereon, and hold the same as if said Agreement had never been made or issued.

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9.5 Nonliability of Agents and Employees

No member, officer, agent, director, or employee of Authority or Airline shall be charged personally or held contractually liable by or to the other party under any tem1 or provision of this Agreement or because of any breach thereof or because of its or their execution or attempted execution.

9.6 Non-Waiver ofRights

A. No tennination of this Agreement in accordance with the rights of either party under this Agreement to terminate shall be considered a forfeiture, such rights being a part of the consideration for this Agreement and of the essence hereof.

B. Neither party shall be held to be in breach hereof because of any failure to perfonn any of its obligations hereunder if said failure is due to any cause for which it is not responsible and over which it has no control; provided, however, that the foregoing provision shall not apply to failures by Airline or Authority to pay fees and charges or otherwise meet its financial obligations under this Agreement; and provided further, that the foregoing provision shall not prevent either party from exercising any right which it may otherwise have as a matter oflaw to tenninate the tenn hereof.

C. The waiver of any breach, violation or default in or with respect to the performance or observation of the covenants and conditions contained herein shall not be taken to constitute a waiver of any such subsequent breach, violation or default in or with respect to the same or any other covenant or condition hereof.

9. 7 Severability

If a provision hereof shall be finally declared unenforceable or illegal by any court or administrative agency having jurisdiction, the entire Agreement shall not be unenforceable, but the remaining provisions shall continue as nearly as possible in accordance with the original intent of the parties.

9.8 Assignment and Sublease

Airline shall not, directly or indirectly, assign, sublease, sell, hypothecate or otherwise transfer this Agreement, or any rights granted herein, without the prior written consent of Authority.

9.9 Entire Agreement and Amendments

This Agreement, together with all exhibits attached hereto, constitutes the entire agreement between the parties hereto, and any other representations or statements

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heretofore made, verbal or written, are merged herein. This Agreement may be amended only in writing executed by duly authorized representative of the parties hereto.

9.10 Consent of the Parties

In all instances in this Agreement where consent or approval of one party is required for an action by the other party, such consent shall be in writing and not unreasonably withheld.

9.11 Notices

Notices to either party provided for herein shall be in writing and shall be sufficient if hand delivered or sent by certified or registered mail, postage prepaid, or if transmitted by electronic means provided receipt is confirmed contemporaneously, addressed as follows:

To Authority:

To Airline:

Western Reserve Port Authority ATTN: Daniel J. Dickten, A.A.E. Director of Aviation Youngstown-Warren Regional Airport 1453 Youngstown-Kingsville Rd. NE Vienna, OH 44473

Aerodynamics Incorporated ATTN: Scott Beale, CEO 25700 Science Park Drive, Suite 210 Beachwood, Ohio 44122

or to such other respective addresses as the parties may designate to each other in writing from time to time.

9.12 Successors and Assigns Bound

This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto.

913 Governing Laws and Time

This Agreement shall be governed by the laws of the State of Ohio. Time shall be of the essence.

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IN TESTIMONY WHEREOF, witness the signatures of the pm1ies hereto, this day and year first above wlitten.

WITNESS

Title: Executive Director of Aviation

WITNESS Q

~~ AERODYNAMICS IN CORPORA TED

By: ~~-/··7 Scott A. Beale

Title: Chief Executive Officer

This Agreement has been approved for the Authmity as to le lity of form and content by:

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EXHIBIT A

PREMISES

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PropOIIed lld'nrbilhed lU' P.BB

Elll' • B '137 4' 10". 8' 6" door height

B'737·MD83·A320-B'7S7 8' (/ • 13' 2" doar height

Will drop toS' doorsill height but

ex c:eeds 8_ -~ "'• AOAslope

• • Passenger Hold Room A

(210 scats)

• •

B731-MD83-A320-B167 8' 6". 14' g• door height

Will drop to 5' doorsill he1ght but exceeds 8.3°1D

ADA slope

.. :- ~ Jet~ri~t _ -:::,· 1 . !!---.- .

--~~~·-:.":;

YNG TERMINAL SPACE Passenger Boarding Bridges Ao.·r

~ - Proposed ~ space -- l

EXHIBITB

AIR SERVICE PLAN

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EXHIBIT B

YNG -AERODYNAMICS, INC. AIR SERVICE

AIR SERVICE PLAN

OVERVIEW The Western Reserve Port Authority {WRPA) Board of Directors on June 11, 2014 passed a Motion to

authorize the Director of Aviation to pursue daily service with Aerodynamics Inc. (ADI), a small Part 121 air carrier in business for nearly 50 years that operates Embraer 145 regional jet aircraft. ADI intends to

provide daily scheduled air service from the Youngstown-Warren Regional Airport (YNG or Airport) to

the most optimal airline connecting hub. A planned start-up is projected for October 1, 2014. Upon

sustainment of the initial destination service, an evaluation is planned to determine whether the level of

profitability is available to start a second destination. In August 2012 the U.S. Department of

Transportation approved the use of $780,000 in SCASDP grant funding to reimburse, in part, the costs of

a locally-provided revenue guarantee and other funding required to attract and establish the service

described here. These costs are further described below. The revenue guarantee will be utilized to keep

the airline at a 5% profit margin until the service sustains itself, at which time the subsidy will cease. In

the event the total revenue guarantee of $1.2 million is depleted prior to the service sustaining itself, no

additional funds shall be paid to the airline and the airline shall be free to discontinue the service if it so

elects.

DESTINATION CANDIDATES The following is an alphabetical list of the top preferred business (connecting) destinations based on

surveys from local business travelers for new start-up daily service from the Youngstown-Warren

Regional Airport as surveyed by the Airport:

1. Atlanta {ATL) 5. Detroit {DTW)

2. Charlotte ( CL T) 6. New York/Newark (LGA/EWR)

3. Chicago (ORD/MDW) 7. Philadelphia (PHL)

4. Dallas Ft. Worth {DFW) 8. Washington, DC {DCA/IAD)

ESTIMATED REVENUE GUARANTEE PAYOUTS/ PROFIT MARGINS OF CANDIDATE DESTINATIONS Based on the candidate destination forecasts, the following (1 - 6) are the estimated revenue guarantee payouts and eventual profit margins at peak demand for each potential destination calculated by AvPorts.

Estimated Revenue Eventual Market: Guarantee Payout: Profit Margin: Airline Hub 1. Detroit (DTW) $604,309 39% Delta 2. Philadelphia (PHL) $997,287 23% New American (AA I US) 3. Atlanta (ATL) $1,271,929 24% Delta 4. Charlotte (CL T) $1,273,595 19% New American (AA I US) 5. Washington-Dulles (lAD) $1,265,940 8% United 6. Chicago O'Hare (ORO) $1 ,690,449 1% United I New American 7. New York (LGA) NIA Slot Restricted Delta I American 8. Newark (EWR) NIA Slot Restricted United 9. Washington DC (DCA) NIA Slot Restricted US Air I New American 10. Dallas Ft. Worth (DFW) Currently not Sustainable New American (AA I US)

The YNG catchment area's total leakage for complete year 2013 was 563,604 annual O&D passengers. In each scenario, we estimate that the flights will recapture 7% of total YNG leakage, which is a realistic portion of the market.

EXHIBIT B

VNG -AERODYNAMICS, INC. AIR SERVICE

FUNDING RESOURCES The Youngstown Parties (WRPA/Youngstown-Warren Regional Airport, Mahoning County, Trumbull County, various private-sector corporations/businesses, and YNGAir Partners) are providing a revenue guarantee of up to $1.2 million to attract and establish the service described here. The Youngstown Parties anticipate receipt of reimbursement of 65% {$780,000) of this sum under the Small Community Air Service Development Program (SCASDP) grant noted above. The YNG Parties will also provide the additional funding raised from local contributions and in-kind services described below. A fund raising campaign by YNGAir Partners is in progress to provide additional revenue guarantees. WRPA will administer all disbursements to ADI and all requests for reimbursement under SCASDP.

AIRLINE OPERATIONAL "START-UP" FUNDING The Youngstown Parties will provide $130,000 to ADI in advance as initial start-up funding to establish and operate the air service from the Youngstown-Warren Regional Airport to the most optimal airline hub. This funding is independent of all other funding.

PASSENGER BOARDING BRIDGE- VNG GATE 6 Upon sustainment ofthe first route, the Airport will provide a Regional Jet Passenger Boarding Bridge at Gate 6 in the Terminal South Wing for use by the Airline. The Airport has received bids for a refurbished RJ bridge at a cost of $180,000. The Airport will be using a covered walkway with all-weather boarding mechanism at a cost of approximately $50,000 as the initial passenger boarding/de-boarding facility at Gate 6. These costs will be credited towards meeting the SCASDP grant's in-kind service requirement.

OPERATIONAL ABATEMENTS The Airport will provide operational abatements by waiving all terminal operating costs for the first two years in the amount of approximately $150,000. These costs will also be credited towards meeting the SCASDP in-kind service requirement.

MARKETING, ADVERTISING AND PROMOTION The Airport will provide start-up marketing, advertising and promotional campaign funding, plus in-kind services for additional advertising as provided in the SCASDP grant agreement, as follows:

Destination A- $15,000 Pre-Start up Campaign I $100,000 In-kind Services over 2-years Destination B- $10,000 Pre-Start up Campaign I $80,000 In-kind Services over 2-years

REVENUE GUARANTEE PROCEDURE Virtually all start-up airline service loses money during the initial sustainability phase. The revenue guarantee provides funding to enable the airline to maintain a reasonable profit margin of 5% through the start-up.

The airline will provide invoices to WRPA no less frequently than monthly for the operational deficiencies experienced, measured against a 5% net profit margin. Payment in response to the airline's invoices will be provided by WRPA (on behalf of the Youngstown Parties) to enable the airline to maintain a 5% net profit margin. WRPA will then apply for reimbursement under the SCASD grant of 65% of the disbursement made to the airline, with reimbursement expected to occur within 60 days after the respective application.

EXHIBIT B

YNG -AERODYNAMICS, INC. AIR SERVICE

For any calendar month in which the airline experiences a net profit margin of 5% or greater, no revenue guarantee disbursement shall be provided. When the airline has experienced a net profit margin of 5% or greater for each of 12 consecutive calendar months, the service shall be considered to have achieved sustainability and the revenue guarantee shall cease.

In connection with each invoice, which shall be accompanied by an explanatory accounting prepared by the airline, determination of the airline's net profit margin shall be made in accordance with Generally Accepted Accounting Principles (GAAP) established by the Financial Accounting Standards Board (FASB).

EXIDBITC

AIRPORT RATES & CHARGES SCHEDULE

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EXHIBIT C AIRPORT RATES & CHARGES SCHEDULE

Airlines Section

The rates, charges and fees for Airline Operations below have been establi shed by the Westem Reserve Port Authority in an effort to meet the revenue goals for the Youngstown-Wanen Regional Airpm1 .

TenninaliRent

Airport Tenninal (Ticket Counter, Operations Office, Other Space -Airline):

Signatory $12.50 I s.f.

Non-Signatory $15.501s.f.

GateiPassengerBoardingBridgeFees

All gates, loading bridges and devices at YNG are common use. Unless the entity is currently operating under an existing Airpm1 I Airline or other Use Agreement, the WRPA will incorporate the following passenger boarding bridge fee (per use) to recover costs associated with the maintenance and operation of the device:

Gate Gate I (PBB): Gate 2: Gate 3: Gate 4: Gate 5: (PBB) Gate 6:

Signatory­Scheduled Operator $50.00 No Cost No Cost No Cost $50.00 No Cost

Remain Over Night (RON) Fees

Non-Signatory Unscheduled Operator

$75.00 $25.00 $25.00 $25.00 $75.00 $25.00

Commercial Air Cani.ers (Passenger or Cargo) that RON on the Airp011 Terminal or Cargo Aprons and Lighter than Air Aircraft that RON on the Airp011 will be charged a flat rate fee $50.00 per night.

Landing Fees

Unless an entity is cun·ently operating under an existing Airpm1 I Airline or other Use Agreement , Commercial Air Cani.ers or private Charters (either passenger or cargo) and general aviation aircraft weighing more than 12,500 lbs. (MGL W) will pay landing fees in accordance with the following schedule:

Page2.

Scheduled I Commercial Signatory Operators

$1.29/1,000 lbs.

Unscheduled I Commercial Non-Signatory Operators

$1.49/1,000 lbs.

• Weight will be based on the cet1ified maximum gross landing weight of each aircraft with a minimum fee of $25.00 for Commercial Service Aircraft.

Airoort Security and Use Fee

There shall be an Airpo11 Use fee of$1.00 per enplaned passenger.

Passenger Facility Charge (Airline)

There shall be a passenger facility charge of $4.50 per enplaned passenger.

SIDA I AOA Badging Fees:

SIDA Badge- Initial Badge: $45.00 /Replacement Badge: $25.00

EXHIBITD

GROUND HANDLING PROPOSAL

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... w WINNER AVIATION _

Between

STANDARD GROUND HANDLING AGREEMENT SIMPLIFIED PROCEDURE

ANNEX 81.0- LOCATIONS, AGREED SERVICES to the Standard Ground Handling Agreement (SGHA) of 2008

Winner Aviation 1453 Youngstown-Kingsville RD NE Vienna, Ohio 444 73

And hereinafter referred to as the 'Handling Company'

And

ADI 25700 Science Park Dr Suite 210 Beachwood, OH 44122

And hereinafter referred to as the 'Carrier'

Location .___Y_NG _ ___,I Valid From I 5/27/2014 I Valid to I 12/31/2016 I Replaces

This Annex B is prepared in accordance with the simplified procedure whereby the Carrier and the Handling Company agree that the terms are not part of a Main Agreement or Annex A of the SGHA of January, 2008 as published by the International Air Transport Association. However, terms shall apply as if such terms were repeated here in full. By signing this Annex B the parties confirm that they are familiar with aforementioned Main Agreement and Annex A terms and conditions. Winner Aviation has prepared this ANNEX B in Accordance with the SGHA of March 12, 2013.

Section 1:

Section 2:

Section 3:

Section 4:

Section 5:

Section 6:

Handling Fee

As requested by "Carrier and Agreed by "Handling Company" . See Attachment A.

Lav Service

As requested by "Carrier and Agreed by "Handling Company" . See Handling Charges

Potable Water Service

As requested by "Carrier and Agreed by "Handling Company" . See Handling Charges

Deicing Services See Handling Charges

Sky Cap

As requested by "Carrier and Agreed by "Handling Company. See Handling Charges. Equipment

As requested by "Carrier and Agreed by "Handling Company. See Handling Charges.

Handling Charges

Inclusions Charges Section 1 Handling for E-145 aircraft $250 per turn Section 2 Lavatory service Included Section 3 Potable Water Service Included Section 4 De-icing & Anti-icing Services $16.99 Type I $18.99 Type IV Section 5 Sky Cap Included in turn cost Section 6 Equipment Provided by Winner Aviation Additional Charges

PARAGRAPH 4 SETTLEMENTS

4.1 IAT A Standard Ground Handling Agreement AHM 810 January 2008, the Handling Company shall:

(Settlement of Account Shall be effected in US Dollars)

PARAGRAPH 6 DURATION/TERMINATION

6.1 The term shall commence on the commencement date of schedule attached after which this Agreement may be terminated or renewed by either Party upon a THIRTY (30) day written notice.

PARAGRAPH 7 LIABILITY AND INDEMNITY

7.1 The Handling Company shall indemnify the Carrier against any physical loss of or damage to the Carrier's Aircraft caused by the Handling Company's negligent act or omission PROVIDED ALWAYS THAT the Handling Company's liability shall be limited to any such loss of or damage to the Carrier's Aircraft in an amount not exceeding the level of deductible under the Carriers Hull All Risk Policy which shall not, in any event, exceed USD 1 ,500,000 except that loss or damage in respect of any incident below USD 3000 shall not be indemnified. In the case of damage to the Carrier's aircraft the Handler will test its employees involved for the presence of drug or alcohol.

PARAGRAPH 9 GENERAL

9.1 In the case of absence of instructions by the Carrier, the Handling Company shall follow its own standard practices and procedures. The Carrier requires all personnel involved in the service of its aircraft be part of the Handler's or other drug testing program as a condition of employment. Any training set forth by the Carrier will be completed in the allotted time given.

PARAGRAPH11 CONFIDENTIALITY

11.1 Each party shall use reasonable precautions to keep confidential (including ensuring that its officers, employees, sub-contractors and agents keep confidential) all information (i) which one party to his Agreement may have, or acquires, in relation to the customers, business, assets or affairs of the other party; or (ii) which relates to the contents of this Agreement. Neither party will use for its own business purposes or disclose to any third party any such confidential information without the prior consent of the other party.

Signature __________ _ Signature ___________ _

Chad Hughes Commercial Ground Operations Manager Chairman

EXHIBITE

MARKETING & ADVERTISING PLAN

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EXHIBIT E

YNG- ADI Marketing & Advertising Plan

The Primary thrust of the Marketing & Advertising Plan is to regain local travelers at the Youngstown-Warren Regional Airport (YNG). Management will use this framework to create a comprehensive tactical plan to further the community's Daily Airline Service needs with Aerodynamics, Inc. (ADI) at the "hometown" air carrier to serve the Mahoning Valley. The Airport's current Strategic Air Service Development Plan and the "Airport's Top 20 Destination Survey" have been used to implement the strategies and supporting actions in the months and years to come to solidify the Youngstown- Warren Regional Airport as the Region's Primary Commercial Service Airport and ADI as the region's air service provider.

• Regain 35% of the market travelers who have been relying on other than Youngstown-Warren Regional Airport (YNG) for travel needs in one year.

• Prevent airport leakage by aggressively promoting the Airport as a convenient, reliable, cost-competitive regional alternative to flying out of Pittsburgh, Cleveland­Hopkins, and Akron-Canton Airport as the preferred and convenient facility.

• Reverse lingering misperceptions about YNG's air service and heighten awareness of the airport as air service opportunities grow at the Airport.

• Engage the travel agencies as partners in meeting the challenge. • Encourage community ownership of the ADI air service solution. This includes

engaging the local media in a partnership to "get the talk right" about the airport and it's air service partner, ADI, and to encourage locals to avail themselves of its service. This is an urgent matter, given the delicate status of start-up airline service and the new ADI service to the community's most desires destinations.

• Implement a strong corporate airline use program by attracting corporations to choose ADI as their airlines and YNG as their corporate flight facility.

Program Objectives

1. Utilize committees in the community to assist in efforts to implement and support ADI airline service at YNG.

* * * *

Airport Promotional Committees and Support Groups- YNGAir Partners Western Reserve Port Authority Aviation Committee The Youngstown I Warren Regional Chamber Public Relations Committees

2. Use community support to inform the local traveling public of new ADI air service available at the Youngstown-Warren Regional Airport (YNG). * Establish a Fare Equalization Committee using YSU student- interns to

complete a monthly fare analysis among the airlines serving YNG and close competitive airports (PIT, CLE, CAK and ERI).

EXHIBIT E

3. Hold receptions for travel agents to advise them of the latest conditions and new ADI airline service at YNG.

4. Hold businessman's receptions to request and thank them for support for the Airport and advise them of the latest conditions and new service objectives at YNG. * Arrange by Youngstown I Warren Regional Chamber's membership survey. * Paid by Airlines, the Airport and the Regional Chamber

5. Initiate an ongoing communication with frequent flyers via Flight Bulletin, Luggage Tag program and mailing list. * Flight Bulletin agreement between the YNGAir Partners Support Group as a

fund raising project (from advertisements in Flight Bulletin) and YNG Airport. * Luggage tag display in terminal inviting businessmen and women to drop

their card in for a free luggage tag. YNG personnel to make up tags and do mailings.

6. Coordinate with community members, ADI and special events personnel regarding advantages of YNG. * Radio Program- 26 week 60 second radio spots, Airline specials,

mystery promotion as "In-Kind" Service. * Television - 60 second public service spots also as "In-Kind" Service. * Outdoor bulletin boards located throughout strategic points in the

Mahoning Valley. "Save your sanity, save time, save money at YNG." * Youngstown-Warren Regional Airport I Airlines signs at the Eastwood

Park for the Mahoning Valley Scrappers and other similar events; * Luggage Tag give-aways at Scrappers games and other similar activities; * Familiarization trips for travel agents into YNG with Hotel I Motel

Associations, Tourism Group and Airlines. * Familiarization trips for travel agents from YNG to destination points

served by YNG Airlines. * Coordination with Advertising Agencies for inclusion of YNG in

outgoing advertising for the Mahoning Valley area. * Aviation Open House Day at YNG with ADI aircraft displays during

Aviation week complete with jazz band festival. * Travel Agents special promotion to Fly ADI at YNG. * Flight Bulletin- 10,000 monthly to community on ADI flights at YNG in tourist

and business related locations.

Pre-ADI Start-up objectives (3 months out) from Service Announcement to start-up

The Airport will upon announcement of the service launch a start-up initiative to assist with the pre-booking of passengers. The initiative will consist of daily media spots both TV and Radio, outside advertising and Facebook, Twitter and Website Promotions.

EXHIBIT E

MULTIMEDIA MARKETING, ADVERTISING AND PROMOTIONAL CAMPAIGN

Once the Youngstown-Warren Regional Airport and a network carrier have final-ized an agreement for regularly scheduled commercial air service, these same partners will launch comprehensive public awareness, marketing, and promotional campaigns in support of the new air service. These campaigns will comprise of four components:

1. Earned Media

a. Upon signing of the agreement: 1. Conduct a press conference at YNG to announce the start-up of the

new air service. Attendees will include: a. YNG and Western Reserve Port Authority officials b. Network carrier officials c. State and local public officials and community leaders

2. Issue press releases to local, state, and national media announcing the start-up of the new air service.

3. Arrange one-on-one interviews with local media for YNG, network carrier, and state and local public officials.

b. On first day of air service: 1. Arrange for local morning news shows to broadcast from YNG. 2. Arrange a remote radio broadcast. 3. Conduct press conference at YNG at the time ofthe first flight. 4. Arrange one-on-one interviews with J'NG officials, netwm·k airline

representatives, and passengers. 5. Issue press release to local, state, and national media.

c. Ongoing earned media: 1. Monthly press releases featuring news about the air service including

success ofthe flights

2. Paid media directed at the genera I public

a. TV, radio, and print ads in markets within a 45-mile radius of YNG. Ads will begin to run approximately three months before initiation of service and will continue for twelve months after the first flight. 1. TV spots will appear on the four Youngstown-based

network TV outlets and the Time-Warner and Comcast cable systems that serve the market area. Most spots will run on shows popular with business travelers.

2. Radio spots on stations within the market area that reach business travelers

3. Print ads in the Vindicator, Warren Tribune Chronicle, Sharon Herald, and Youngstown Business Journal.

EXHIBIT E

3. Paid media specifically targeted to business travelers

a. Direct mail piece to members of the Regional Chamber and YNGAir Partner (membership rolls collectively exceed 2,500). Mail pieces will be sent three months before service begins, at start-up, and one month after air service is underway.

b. E-mail blasts to members of the Regional Chamber and YNGAir Partner two months and one month before air senice begins, at start-up, and monthly thereafter.

4. Digital Marketing/Social Media

a.

b.

c.

Notice of agreement will be posted on YNG, Regional Chamber, and YNGAir Partners web sites and Facebook pages Press conferences and other events surrounding the first flight will be five streamed on YNG website Schedule and real time flight information will be posted on YNG website and Facebook page.

In addition, the Convention and Visitors Bureaus of Mahoning, Mercer, and Trumbull Counties will augment the above campaigns by communicating to potential visitors to the Community that air service has returned to YNG and to consider air service as a travel option.

Short-term objectives (3-12 months)

• Assure the success of the initial ADI air service destination direct non-stop service to anywhere in the world through Airport.

• Assist in the establishment and sustainment of daily non-stop ADI service from YNG to a connecting hub airport, such as Chicago, New York (Newark, etc.) or Detroit with ADI. Its success can be the harbinger for the YNG airport's resurgence.

• Reduce leakage among those individuals who have long and lingering memories of poor past performance, causing them to "swear off'' YNG.

• Establish a corporate sales and marketing function, staffed by someone whose sole responsibility is to call on and recruit regional corporate travel officials to fly ADI out of YNG. Implicit in this objective is the design and implementation of a corporate travel program, including incentives and rewards.

Mid-term objectives (12-24 months)

• Increase awareness of fundamental service improvements at the airport and ADI air service within the traditional catchment area.

• Assure the success of the daily direct non-stop ADI services to the connecting hub

EXHIBIT E

• Establish and sustain a second daily non-stop ADI service from YNG to a connecting hub airport, such as Washington-Dulles, New York, Atlanta or Dallas Ft. Worth with another Network Airline.

Long-term objectives (24-48 months)

• Use improvements in ADI service, customer service and fare equity to begin attracting new passenger traffic from parts 60 - 100 miles and greater from the airport.

Note: This is very much a "first impression" risk as in "you only get one chance to make a first impression." YNG should be confident that the service marketed to that new service area would meet or surpass customer expectations.

Effective Use of Community Airport Marketing

I. Background

• The Airport lost airlines in 2003 and was no longer self-supporting after a four year decline in enplanements;

• Several things were thought to have caused declining enplanements, including loss of EAS Program funding however, implementing leisure airline Allegiant Air in 2006 re-established the airport as a passenger service airport;

• Effective use of the community's interest in the Allegiant leisure flights to Orlando, St. Petersburg and Fort Meyers, Florida Myrtle Beach North Carolina show how a dramatic turnaround occurred through the effective use of the community.

• Effectiveness of the new ADI daily non-stop service.

2. Media Sources

* The Youngstown State University Business Department in conjunction with the Airport's Marketing Coordinator and Air Service Development Consultant conduct week long surveys of passengers at YNG. The results of the surveys should indicate what percentage of our population is driving over an hour to neighboring airports due to lower fares and more direct flights. The results should assist the Airport in determining how better to serve Mahoning Valley residents and initiate a task force to suggest ways to set fares more in line and acquire more service;

* Implement an Airport I ADI Promotions Taskforce of community leaders to spearhead the development of a marketing plan which suggests a penetration strategy to gain back the percentage of the population driving to other airports. Members should include the Director of Aviation, Airport Marketing Coordinator, Port Authority Staff, YNGAir Partners, Visitors & Convention bureaus, County Commissioners, Regional Chamber and Port

Authority Board Members.

EXHIBIT E

* The Regional Chamber should focus on identifying businesses who fly and learn of preferred destinations as well as increasing awareness. The Airport conducted surveys in 2010 and 2013 that identified destinations where businesses say they want to fly and where Mahoning Valley businesses and residents actually fly to, at what frequency they travel, and the expenses incurred as a result of air travel. This information was acquired through the Air

Service Travel Bank Initiative in 2012-13. The Airport with the Chamber's assistance has used this data to market the Airport Airlines for their implementation of services to these desired destinations from YNG. The Youngstown I Warren Regional Chamber has pledged their support to the Airport for the development of scheduled ADI air service to connecting Destinations in the attached Endorsement.

Summary

ADI daily non-stop service at the Youngstown- Warren Regional Airport is a complex challenge and must be addressed on various fronts simultaneously. The plan will not be quick; but steady, incremental growth is a real possibility if the community accepts the challenge of making ADI at YNG its first choice when fares and schedules allow. This marketing plan offers strategic approaches to making that happen, but it needs to be flexible, given the nature of the industry, and the board and staffofthe Western Reserve Port Authority need to remain vigilant and adjust the plan as market forces dictate.

Presently, good things are happening with YNG passenger service recently with the success of Allegiant Air, but the improvements will not be sustainable unless the catchment area is broadened and regional travelers commit to once again traveling out of YNG on ADI on a daily scheduled basis and reversing a trend toward using other regional airports. They will have to give YNG chance to prove itself, and they will have to help in "getting the talk right" about the positive changes in service and reliability. Clearly, one critical success factor will be the amount of business travel the airport can generate. The incumbent carriers pull no punches in saying business travelers make service sustainable. It is a daunting challenge that requires the same kind of community commitment that sparked the YNG resurgence with Allegiant Air Service in 2006 by such support groups as the YNGAir Partners ..

To support the activities described in the Marketing & Advertising Plan and to establish YNG as a Regional Primary Passenger Service Airport, the airport facilities will require additional improvements, many of which have been completed over the past three years. The combination of the completed and proposed Airport improvements and continued Air Service Development through the Airport Marketing & Advertising Plan will no doubt earn the Youngstown- Warren Regional Airport the title, "the Alternative Regional Primary Commercial Service Airport " providing positive economic spin-off and jobs to the surrounding communities.

ATTACHMENT 2

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P.O. Box35 15985 Eut Hi&h St. Middlefield, Ohio 44062 4401632-1666-8881801-1666 Fax 440/632-1700 EasyLine 877/MBC-2794 BasyLink@middlefioldbenlc.com www.middlofioldbank.com

*******************************SNGLP 2746 0.4791 SP 0.500 14 1 53

hu••ll dnlln• •·l••n•nlll•••ln••ullnl••••l•••l••ll•lllll• WESTERN RESERVE PORT AUTHORITY

1453 YO-KINGSVILLE RD NE VIENNA OH 44473

30 3 0

CORTLAND OFFICE 3450 NILES CORTLAND RD CORTLAND, OH 44410 PHONE:330-637-3208

BUSINESS MONEY MKT ACCOUNT : a· 1

07/01/14 THRU 07/31/14 DOCUMENT COUNT: 3

Page 1 of 1

BUSINESS MONEY MKT ACCOUNT s•••l DESCRIPTION

BALANCE LAST STATEMENT DEPOSIT DEPOSIT DEPOSIT INTEREST BALANCE THIS STATEMENT

TOTAL CREDITS (4) TOTAL DEBITS (0)

AVERAGE LEDGER BALANCE: INTEREST PAID THIS PERIOD: INTEREST PAID 2014:

DEBITS CREDITS

1,066.77 1,15~.96

39,839.25 281.13

DATE

06/30/14 07/21/14 07/21/14 07/29/14 07/31/14 07/31/14

42,343.11 MINIMUM BALANCE .00

INTEREST

INTEREST EARNED: DAYS IN PERIOD:

BALANCE

1098,564.84 1099,631.61 1100,787.57 1140,626.82 1140,907.95 1140,907.95

1,098,564.84

1,103,208.96 281.13

2,376.93 ANNUAL PERCENTAGE YIELD EARNED:

281.13 31

.30%

ITEMIZATION OF OVERDRAFT AND RETURNED I TEM FEES

*********************************************************************** * *

TOTAL FOR THIS PERIOD

TOTAL YEAR TO DATE

* *

*---------------------------------------------------------------------* * TOTAL OVERDRAFT FEES: $.00 $.00 * *---------------------------------------------------------------------* * TOTAL RETURNED ITEM FEES: $.00 $.00 * ***********************************************************************

M_,_mber fE) FDIC t:ENm NOTICE: SEE REVHRSE SIDE FOR IMPORT ANT NORMA TION

Farmers National Bank

FARMERS 330.533.3341 1.888.988.3276 612 00014 99 PAGE: 1

20 South Broad St. I P.O. Box 555 I Canfteki, OH 44406 ACCOUNT= 2 ••• 1 07/31/2014

MINIMUM BAT..ANCE AVERAGE BALANCE

WESTERN RESERVE PORT AUTHORITY YNG-WARREN REGIONAL AIRPORT ECONOMIC DEVELOPMENT 1453 YOUNGSTOWN KINGSVILLE RD VIENNA OH 44473

COMMERCIAL ANAI~YSIS ACCOUNT 211 .... n

lAST STATEMENT 06/30/14 267,364.14 788 CREDITS 506,973.82 88 DEBITS

THIS STATEMENT 07/31/14

- - - - - - - - - - DEPOSITS - - - - - - - - - -

30 13 65

197,484.27 677,590.33 350,685.31 524,389.29

REF# ..... DATE ... .. . AMOUNT REF# . . ... DATE ..•... AMOUNT REF # •• • •. DATE ...•.. AMOUNT 07/02 4,165 . 50 07/24 2,137 . 88 07/29 4,755.50 07/08 3,984.73 07/24 7,998.79 07/29 6,288.00 07/15 10,398.00 07/29 85 . 00 07/29 43,589.47 07/16 2,231.26 07/29 94.92 07/16 43,567.10 07/29 272.57

OTHER CREDITS - - - -DESCRIPTION DATE AMOUNT BANKCARD MERCH DEP 94 237 07/01 3.00 BANKCARD MERCH DEP 94 237 07/01 14.00 BANKCARD MERCH DEP 94 237 07/01 17.00 BANKCARD MERCH DEP 94 37 07/01 17.00 BANKCARD MERCH DEP 94 237 07/01 18.00 BANKCARD MERCH DEP 94 31 07/01 18.00 BANKCARD MERCH DEP 94 237 07/01 21.00 BANKCARD MERCH DEP 94 237 07/01 2.1.00 BANKCARD MERCH DEP 94 237 07/01 21.00 BANKCARD MERCH DEP 94 237 07/01 21.00 BANKCARD MERCH DEP 94 237 07/01 28.00 BANKCARD MERCH DEP 94 237 07/01 28.00 BANKCARD MERCH DEP 94 37 07/01 28.00 BANKCARD MERCH DEP 94 37 07/01 28.00 BANKCARD MERCH DEP 37 07/01 28.50 BANKCARD MERCH DEP 37 07/01 30.00 BANKCARD MERCH DEP 37 07/01 30.00 BANKCARD MERCH DEP 37 01/01 30.00 BANKCARD MERCH DEP 37 07/01 35.00

* * * C 0 N T I N (J E D * * *

www. farmersbankgroup.com Gl SEE LAST PAGE: Of:< IMPORl ANT INFORMATION l:.. MEMBER FDIC

Pc

ATTACHMENT 3

Western Reserve Port Authority, Ohio Combined Statement of Cash Receipts, Cash Disbursements, and Changes in Cash Basis Fund Balances

For the Period January 1, 2014 Through July 31, 2014

Port Economic Authority Aviation Development

Cash Receipts Intergovernmental - Lodging Taxes $752,876 $0 $0 Intergovernmental- Economic Development 0 0 0 Intergovernmental - Aviation 0 9,699 0 Operational Fees 1,298 98,352 413,500 Fuel Flowage Fees 0 20,102 0 Landing Fees 0 41,028 0 Hangar Rentals 0 116,220 0 T-Hangar Rentals 0 33,230 0 Facility I Land Leases 0 101,692 5,000 Terminal Leases 0 30,631 0 Parking Lot Fees 0 259,013 0 Proceeds From Debt 0 0 0 Refunds and Reimbursements 0 52,769 210 Passenger Facility Charges 0 163,176 0 Miscellaneous Receipts 0 11,018 25,856

Total Cash Receipts 754,174 936,930 444,566

Cash Disbursements Personal Services 0 519,682 124,994 Materials and Supplies 0 68,608 7,928 Airport Security 0 29,943 0 Marketing and Promotions 0 75,224 30,268 Custodial Services 0 10,586 0 Capital Outlay 26,200 269,537 4,541 General and Liability Insurance 0 37,556 0 Professional/ Contractual Services 65,454 185,130 99,793 Conferences and Travel 0 17,149 3,760 Communications 0 15,660 4,177 Utilities 0 106,586 0 Fuel and Oil 0 31,007 0 Repair and Maintenance 0 71,690 0 Lease Expenses 0 0 542 Debt Service 0 227,898 0 Matching Share - Federal Grants 0 914 0 Miscellaneous Disbursements 25,000 2,741 30,030

Total Cash Disbursements 116,654 1,669,910 306,033

Excess of Cash Receipts Over/(Under} Cash Disbursements 637,520 ~732,980) 138,533

Other Financing Receipts and (Disbursements) Transfers-In 0 845,000 0 Transfers-Out (845,000) 0 0

Total Other Financing Receipts and (Disbursements) {845,000~ 845,000 0

Net Changes in Fund Cash Balances (207,480) 112,020 138,533

Fund Cash Balances- January 1. 2014 797,800 258,538 530,315

Fund Cash Balances • July 31, 2014 $590,320 $370,558 $668,849

Total

$752,876 0

9,699 513,149

20,102 41,028

116,220 33,230

106,692 30,631

259,013 0

52,979 163,176 36,874

2,135,669

644,676 76,536 29,943

105,493 10,586

300,278 37,556

350,376 20,909 19,836

106,586 31,007 71,690

542 227,898

914 57,771

2.092,596

43,073

845,000 {845,000~

0

43,073

1,586,654

$1,629,727

Western Reserve Port Authority Cash Reconciliation Governmental Funds July 31, 2014

<-------Farmers Bank > Cortland Bank General Special Middlefield

Checking Checking Checking MMDA Checking Cuh Account Account Account Account On Hand Total

07/31/14 Depository Balances $66,948.99 $524,389.29 $5,510.46 $35,106.63 $1,140,907.95 $1,200.00 $1,774.063.32

Add: Deposits-In-Transit 8,785.03 0.00 0.00 0.00 0.00 0.00 8.765.03

Less: Outstanding Warrants 0.00 149,561.04 3,559.95 0.00 0.00 0.00 153,120.99

Adjustments 0.00 0.00 0.00 0.00 0.00 0.00 0.00

07131/14 Cash Balances $75,734.02 $374,828.25 $1 !950.51 $35,106.63 $1,1401907.95 $11200.00 $1,629,727.36

I I I I I I v v v v v v

Custodial Credit Risk $0.00 $161,885.39 <--1 <---1 $890,907.95 $1~00.00 $1,0531993.34

<--------- Outstanding Warrants ------> <- Fund Cash Balanc:es -->

CB Checking Account FNB General Checking Account PA Fund $590,320.20 Aviation Fund 370,558.24

None $0.00 9556 $75.00 ED Fund 668,848.92 I 0.00 9635 26,724.00 I 0.00 9642 105.78 Total $1,629,727.36

I 0.00 9643 81 .59 9644 46.00 Depository >< FIBs f£.00

$0.00 9645 100.00 9646 75.00

Middlefield Checking Account 9647 173.80 9681 1,854.00 9648 423.72 9682 7,680.00

None $0.00 9649 32.99 9683 5.862.18 I 0.00 9650 467.82 9684 671 .26 I 0.00 9651 64.00 9685 1,287.00 I 0.00 9652 70.00 9686 2,955.00

9654 27.60 9687 68.50 $0.00 9655 35.00 9688 400.00

9658 600.00 9689 369.23 FNB Special Checking Account 9657 1,121 .64 9690 448.11

9658 1,032.47 9691 35.13 None $949.48 9659 224.94 9692 872.24

I 841 .10 9660 639.40 9693 30.00 I 1,080.98 9661 101 .87 9694 167.60 I 360.64 9662 156.00 9695 1,361 .92 I 327.75 9663 696.44 9696 74.95 I 0.00 9664 11 ,723.18 9697 5,652.50 I 0.00 9665 2,016.00 9698 42.76

9666 285.00 9699 2,706.52 $3,559.95 9667 260.00 9700 1.430.00

9668 460.00 9701 4,330.57 FNB MMDA Account 9669 153.30 9702 210.70

9670 661 .00 30209 6,383.80 None $0.00 9671 207.57 30210 685.10

I 0.00 9672 32.09 30211 2.500.00 I 0.00 9673 1361 .69 30212 2,350.00 I 0.00 9674 151 .38 30213 560.00

9675 230.88 30214 908.15 f£.00 9676 300.00 30215 1,380.00

9677 1,578.08 30216 7,488.08 9678 519.78 30217 670.32 9679 91 .55 30218 3,420.00 9680 !52.67 40008 7,712.89

40009 24,533.30

$1C8,561 .04

Western Reserve Port Authority, Ohio Management's Discussion and Analysis For the Year Ended December 31, 2012

Using the Basic Financial Statements

This annual report is presented In a format consistent with the presentation requirements of Governmental Accounting Standards Board Statement No. 34, as applicable to the Port Authority's cash-basis of accounting.

Report Components

The Statement of Net Position and the Statement of ActMtles provide Information about the cash activities of the Port Authority as a whole.

Fund financial statements provide a greater level of detail. Funds are created and maintained on the financial records of the Port Authority as a way to segregate money whose use is restricted to a particular specified purpose. The Statement of Cash Basis Assets and Fund Balances and the Statement of Cash Receipts, Cash Disbursements, and Changes in Cash Basis Fund Balances present financial Information by either governmental funds or proprietary fund. In addition, the governmental funds statements present the Port Authority's General Fund, Airport Improvement Program Fund, Capital Projects Fund, and non-major funds (Other Funds) In separate columns.

The Notes to the Basic Financial Statements are an Integral part of the government-wide and fund financial statements and provide expanded explanation and detail regarding the lnfonnation reported in the statements.

Bale of Accounting

The basis of accounting is a set of guidelines that determine when financial events are recorded. The Port Authority has elected to present its financial statements on a cash-basis of accounting. This basis of accounting is a basis of accounting other than generally accepted accounting principles.

Under the Port Authority's cash-basis of accounting, receipts and disbursements are recorded when cash is received or paid. As a result of using the cash-basis of accounting, certain assets and their related revenues (such as accounts receivable) and certain liabilities and their related expenses (such as accounts payable) are not recorded in the financial statements. Therefore, when reviewing the financial information and discussion within this report, the reader must keep in mind the limitations resulting from the use of the cash-basis of accounting.

Reportlna the Port Authorttv p e Whole

A reporting entity is comprised of the primary government, component units, and other organizations that are included to ensure that the financial statements are not misleading. The primary government of the Port Authority consists of all funds and departments that are not legally separate from the Port Authority. The Port Authority has no component units and or other organizations whose activities are required to be presented in the Port Authority's financial statements.

The Statement of Net Position and the Statement of Activities reflect how the Port Authority did financially during 2012, within the limitations of cash-basis of accounting.

The Statement of Net Position presents cash balances and investments of the governmental and business-type activities of the Port Authority at year-end. The Statement of Activities compares cash disbursements with program specific receipts for each governmental program and business-type activity. Program specifiC receipts include charges paid by the recipient of the program's goods or services, and grants and contributions restricted to meeting the operational or capital requirements of a particular program. General receipts are all receipts not classified as program specifiC receipts. The comparison of cash disbursements with program receipts identifieS how each governmental function or business-type activity draws from the Port Authority's general receipts. These statements report the Port Authority's cash position and the changes in cash position. Keeping in mind the limitations of the cash-basis of accounting, you may think r:A these changes as one way to measure the Port Authorit(s financial health.

I

Weetem Reserve Port Authority, Ohio Management's Discussion and Analysis For the Year Ended December 31, 2012

Over Ume, increases or decreases in the Port Authority's cash position is one Indicator of whether the Port Authority's financial health is Improving or deteriorating. When evaluating the Port Authority's financial condition, you should also consider other non-financial factors as well such as the Port Authority's reliance on non-local financial resources for operations such as subsidies from other governmental units, the condition of the Port Authority's capital assets and infrastructure, the extent of the Port Authority's debt obligations, and the need for growth in the major local revenue sources such as property taxes.

The Statement of Net Position and the Statement of Activities divide the Port Authority into two distinct types of activities:

Governrnenta/ Activities - The Port Authority's basic services and operations, inclusive of all operations of the Aviation Division, are reported here. Fees and charges for services, rental and lease Income, subsidies from other governmental units, federal assistance grants, and proceeds from debt finance most of these activities. Beneftts provided through governmental activities are not necessarily paid for by the people receiving them.

Business-Type Activities - The Port Authority's activities that enhance, provide, or promote transportation, economic development, and other governmental operations within Mahoning and Trumbull Counties are reported here. Contributions received from other governmental units and community organizations, federal assistance grants, and repayment of debt Issuance finance most of these activities.

ReDortlna the Port Autborlty Moat Slanlftcant Funda

Fund financial statements provide detailed information about the Port Authority's funds - not the Port Authority as a whole. The Port Authority establishes separate funds to manage better Its many activities and to help demonstrate that money that is restricted as to how It may be used is being spent for the Intended purpose. The funds of the Port Authority are split into two categories: goverrvnental and proprietary.

Governments/ Funds - Most of the Port Authority's activities, inclusive of all operations of the Aviation Division, are reported In governmental funds. The governmental fund financial statements (The statement of Cash Basis Assets and Fund Balances and the Statement of Cash Receipts, Cash Disbursements, and ChanQ&s In Cash Basis Fund Balances) provide a detailed view of the Port Authority's governmental operations and the basic services it provides.

Governmental fund information helps determine whether there are more or less financial resources that can be spent to finance the Port Authority's programs. The Port Authority maintains ttvee major governmental funds, the General Fund, the Airport Improvement Program Fund, and the Capital Projects Fund, which the governmental funds statements present In separate columns. The Port Authority maintains three non-major governmental funds, the Passenger Facility Charge Fund, the Debt Service Fund, and the Deposits Fund, which the governmental funds statements present In one column (Other Funds). The programs reported in governmental funds are closely related to those reported In the governmental activities sacUon of the entity­wide statements. We desaibe this relationship In reconciliations presented with the governmental fund financial statements.

Proprietary Fund - When a governmental unit charges customers for the services it provides, these services are generally reported In proprietary funds. When the services are provided to the public, the activity is reported as an enterprise fund.

The Port Authority maintains one proprietary fund that Is classifteS 86 an enterprise fund, the Economic Development Fund.

The Port Authority maintains an ED Division In an effort to utilize fully Its abilities as a port authority to advance economic development within Mahonlng and Trumbull Counties. The Port Authority's activities that enhance, provide, or promote transportation, economic development, and other governmental operations 86 well as grants and contributions received from other governmental units and community organizations to finance these activities are accounted for in the Economic Development Fund.

Western ReHrve Port Authority, Ohio Management's Discussion and Analysis For the Year Ended December 31, 2012

Port Aytborlty a a Whole

Table 1 provides a comparison of net position at December 31, 2012 and December 31, 2011 on a cash-basis of accounting.

Assets

(Table 1) Nat P08Itlon

Governmental ActlvK!es Busineu-Tyoe Activities 2012 2011 2012 2011

Total 2012 2011

Cash and Cash Equivalents $1,900,025 $4,004,450 $341,574 $345,157 $2.241,599 $4,349,607

Net Poaltlon Restricted for:

Capital Outlay Debt Service Other Purposes

Unrestricted

Total Net Position

$1,144,473 182,391

2,150 571.011

$119001025

$3,357,636 $0 202,698 0

0 0 444.116 341.574

$410041450 $341.574

$0 $1,144,473 $3,357,636 0 182,391 202,698 0 2,150 0

345.167 912.585 780.273

$345,157 $2~411599 $413491607

Over time, net position can serve as a useful indicator of a govemmenrs financial position. As mentioned previously, net position of governmental activities at December 31, 2012 decreased $2,104,425, or 53%, a significant decrease from December 31, 2011. This was primarily the result of the Capital Projects Fund realizing In 2012 a decrease in cash and cash equivalents of $2,270,201, or 70%, from 2011 due to this amount being expended from $3,236,156 in Airport Development Revenue Bond proceeds available at January 1, 2012 for Airport capital improvement/replacement/acquisition projects. However, and more inportantly, offsetting this deaease was the General Fund realizing in 2012 an increase in cash and cash equivalents of $126,895, or 29%, from 2011 primarily the result of the improvement In the economy in 2012 from 2011 that led to moderate increases in corporate and general aviation activity in 2012 as compared to recent years that Increased all revenue stream activities of the Aviation Division In 2012 over 2011, and Other Funds realizing in 2012 an increase in cash and cash equivalents of $31,666, or 10%, from 2011 primarily the result of the Passenger Facility Fund realizing a 171',{, in passenger facility charges collected In 2012 over 2011 the result of a 10% Increase in commercial passenger activity in 2012 over 2011. Also, the General Fund's Unassigned (Unreserved/Undeslgnated) Cash Fund Balance was $515,733 at December 31, 2012 as compared to $405,897 at December 31, 2011, a significant increase of $109,836, or 27%.

In addition, as mentioned previously, net position of business-type activities of $341,574 at December 31, 2012 remained relatively constant with $345,157 at December 31, 2011 .

.3

WMtam Raerve Port Authority, Ohio Management's DlscusB/on and Ana/ysi8 For the Year Ended December 31, 2012

Table 2 provides a comparison of changes in net position for 2012 and 2011 on a cash-basis of accounting.

(Table 2) Chllnga In Net Poaltlon

Governmental Gollemm.mal Bu...._Type BUU..Type

Allltvltl• ActiYitlea Adlvll• Acavltlea Total Toll! I 2012 2011 2012 2011 2012 2011

RKelpta: PrognJm Receipts: Chargee for Services $794,145 $848,997 $8,000 $55,000 $802,145 $703,997 Operating Grants and Contributions 0 54,908 136,417 64,683 136,417 119,489 Capltlll GrantB and ContriM.Ions 9801088 1.144.188 0 0 9901088 1.144.188

Total Program Recelpta 1.784.211 1.848.092 143 ... 17 1UI1583 1.927.828 1.9ti7.875

General Reoslpte: GraniB and Entitlements not

Restricted to Specific Programs 1,036, .. 21 884,239 100,000 300,000 1,136,421 1,184,239 Investment Eamtnga 1,804 1,798 481 1,102 2,065 2,900 Proceed~ from Debt 1,545,000 3,827,886 0 0 1,545,000 3,827,885

Repayment d Debt Issuance 0 0 115,000 0 115,000 0 Other Cash Receipt& 266.415 105.378 81023 0 281.438 105~78

Total General Receipts 2.838.440 4.619.100 221.484 301.102 3.059.924 ... 820~2

Total Receipts 4.822.861 8.487.192 384.901 420.885 ... 9871552 618871877

DleburMrnentl: Pet801"181 SeMce8 569,-460 800,500 263,970 205,120 833,430 805,820

Materials and Supplies 117,013 99,037 3,408 4,884 120,421 103,901

Conltactual Servicea 1,165,834 837,332 63,502 33,394 1,229,338 870,728 Conferancas and Travel 20,203 10,843 3,941 2,619 24,144 13,382 Faclly Leases 0 0 1,825 0 1,625 0 Utilities 210,116 221,901 1,502 824 211,818 222,525 Repair and Maintenance 77,281 81,744 0 0 77,281 81,744 Cepllal Outlay 4,166,418 1,005,679 0 0 ... 166,418 1,005,879 lauance of Debt 0 0 0 115,000 0 115,000

Debt Service 325,151 0 0 0 326,151 0 Other Cash Dlsburaements 78lJIXJ at8.284 30J!38 137 107.135 ~421

Total Dl8bursemenl8 8.727.078 2.803.320 388.484 361.658 7.096.5&9 3.284.978

lnc:rea-.'{~88) In Net Postllon (2,104,425) 3,563,871 (3,583) 58,028 (2,108,008) 3,622,897

Net Poeltlon - January 1, 4.004.460 440.579 346.167 288.131 4.349.607 1261710

N.t Po81tlon- December 31, $1,800,025 M,ooyeo $341,1574 SM&.1151 !2,241.- $at,S48,107

Program specific receipts represent 39% of total receipts for governmental activities of which 45% is comprieed of charges for servlcea (fees n charges for 181Vices, and rental and leaae Income) and 55% is comprised of Intergovernmental receipts consisting of restricted grants from other governmental unlta that must be used to provide a specific service.

Western Reserve Port Authority, Ohio Management's Discussion and Analysis For the Year Ended December 31, 2012

Program specific receipts represent 39% of total receipts for business-type actlvttles of which 6% is comprised of charges for services and 94% is comprised of intergovernmental receipts consisting of restricted grants from other governmental units that must be used to provide a specific service. General receipts represent 61% of total receipts for governmental activities of which 54% is comprised of proceeds from debt issued for capital projects and 37% is comprised of intergovernmental receipts consisting of subsidies from other governmental units that are used for general operations.

General receipts represent 61% of total receipts for business-type activities of which 45% is comprised of operating grants received from other governmental units to finance the Port Authority's economic development actJvtty and 52% is comprised of the General Fund's repayment of the $115,000 Bond Anticipation Note issued in 2011 for the acquisition and installation of an access control system for the Airport's parking lot.

Capital outlay (Airport capital improvemenUreplacement/acqulsitlon projects) represents 62% of total disbursements for governmental activities of which 80% Is funded by proceeds of the Port Authority's Airport Development Revenue Bonds and 17% is funded by the Port Authority's Airport Improvement Program Federal Assistance Grants and related required matching funding. Contractual services represent 17% of total disbursements for governmental activities of which 48% Is comprised of costs of services, such as Insurance, security, marketing, legal, and consulting, that are provided by contracted third-parties, 21% Is for engineering costs funded by the Port Authority's Airport Improvement Program Federal Assistance Grants and relatec:l required matching funding, and 31% is for englnHring costs funded by proceeds of the Port Authority's Airport Development Revenue Bonds. Personal services represent 8% of total disbursements for governmental activities and is comprised of payroll and benefit related costs for Aviation Division employees.

Personal services represent 72% of total disbursements for business-type activities and is comprised of payroll and benefit related costs for ED Division employees. Contractual services represent 17% of total disbursements for business-type activities and Is comprised of costs of services, such as Insurance, marketing, legal, and consulting, that are provided by contracted third-parties.

Governmental and Buslneu-Type Activities

If you look at the Statement of Activities, you will see that the first column lists the major S81VIces provided by the Port Authority. The next column entitled Cash Disbursements identifies the costs of providing these services. The next three columns entitled Program Specific Receipts identify amounts paid by customers who are directly charged for services, and for grants received by the Port Authority that must be used to provide a specific service. The Net Receipts (Disbursements) columns compare the program specifiC receipts for governmental and business-type activities to the cost of the services.

s

Governmental Activities

Western Reserve Port Authority. Ohio Management's Discussion and Analysis For the Year Ended December 31, 2012

Table 3 provides a comparison of total cost of services and net cost of services for governmental activities for 2012 and 2011 on a cash-basis of accounting.

(Tabla 3) Cost of Services vs. Net Cost of Services

Governmental Activities Total Cost Net Cost Total Cost Net Cost of Services of Services Of Services of Services

2012 2012 2011 2011

Personal Services $569.460 ($327,322) $600,500 ($346,009) Materials and Supplies 117,013 (67,258) 99,037 (57,065) Contractual Services 1,165,834 (679,450) 837,332 (296,754) Conferences and Travel 20,203 (11,612) 10,843 (6,248) Utilities 210,116 (120,773) 221,901 (127,859) Repair and Maintenance . 77,281 (44,421) 81,744 (47,101) Capital OutJay 4,165,418 (3,453,998) 1,005,679 (162,859) Debt Service 325,151 (187,225) 0 0 Other Cash Disbursements 76,600 (50,806} 46!284 (11,331}

Total $6,727,076 ~$4,942,865~ $2,903:320 ~$1,055,226~

The chart below illustrates the Port Authority's dependence upon general receipts for 2012 and 2011, as program specific receipts have not been suffiCient to cover total disbursements for governmental activities.

$7,000,000

$8,000,000

$1,000,000

$4,000,000

$3,000,000

$2,000,000

$1,000,000

$0

Governmental Activitie• • Program Specific Receipts w. Total DluLnements

FiKal Year 2012 Fi~l YNr 2011

aProgrmn SPKiftc Recelpta

DTatal Dlmu,..mant8

Western Reserve Port Authority, Ohio Management's Discussion and Analysis For the Year Ended December 31, 2012

The Net Cost of Services amount of ($4,942,865) in 2012 for governmental activities represents the costs of the services, which ends up being paid from subsidies provided by Mahoning and Trumbull Counties, investment earnings, debt issuances, miscellaneous receipts, and from fund balances available at January 1. Therefore, dependence upon general receipts for governmental activities is apparent as 73% of disbursements were supported through general receipts. As mentioned previously, an indicator of whether the Port Authority's financial health is improving or deteriorating is its reliance on general receipts. In 2011, only 36% of disbursements for governmental activities were supported through general receipts, a significant increase in 2012 from 2011. However, The Port Authority began in 2011 an extensive 26-project Airport capital improvementlreplacementlacquisition program to address current demand for aircraft hangar and service facilities and expected increase in commercial air service. Therefore, when evaluating financial health, one must also consider that it is common for increased reliance on leveraged financing (a general receipt) during periods of increased capitaJ improvement. In 2012, $3,815,710, or 57% of disbursements for governmental activities were for capital improvement projects and were supported through leveraged financing.

Therefore, only $1,127,156, or 18%, of non-capital improvement projects disbursements for governmental activities were supported through general receipts. In 2011, $981 ,398, or 34%, of non-capital improvement projects disbursements for governmental activities were supported through general receipts. Therefore, the reliance on general receipts for day-to-day operations decreased significantly in 2012 from 2011 .

The chart below illustrates the Port Authority's program specific receipts versus general receipts for 2012 and 2011 for governmental activities.

Governmental Activities- General Receipts vs. Program Specific Receipts

$5,000,000

$4,000,000

$3,000,000

$2,000,000

$1,000.000

$0 Fiscal Year 2012 Fiscal Year 2011

7

Business-Type Activities

Western Reserve Port Authority, Ohio Management's Discussion and Analysis For the Year Ended December 31, 2012

Table 4 provides a comparison of total cost of services and net cost of services for business-type activities for 2012 and 2011 on a cash-basis of accounting.

(Table4) Coat of Services vs. Net Cost of Services

Business-T~ Activities Total Cost Net Cost Total Cost Net Cost of Services of Services Of Services of Services

2012 2012 2011 2011

Personal Services $263,970 ($122,822) $205,120 ($109,343) Materials and Supplies 3,408 (3,334) 4,864 (4,124) Contractual Services 63,502 (62,123) 33,394 (28,315) Conferences and Travel 3,941 (3,855) 2.519 (2,136) Facility Leases 1,625 (1,590) 0 0 Utilities 1,502 (1,469) 624 (529) Issuance of Debt 0 0 115.000 (97,511) Other Cash Disbursements 301536 (29!874} 137 (116}

Total $368,484 ~$2251067~ $361,658 i$242,074!

The chart below illustrates the Port Authority's dependence upon general receipts for 2012 and 2011. as program specific receipts have not been sufficient to cover total disbursements for business-type activities.

$400,000

$300,000

$200,000

$100,000

Bualneae-Type Activities • Program Specific Receipts vs. Total DisbUI'Hmenta

Fiscal Year 2012 Fiscal Year 2011

I

DPrag,_, Specific Recelt*

aTolall DIUu...,..nts

Western Reserve Port Authority, Ohio Management's Discussion and Analysis For the Year Ended December 31, 2012

The Net Cost of Services amount of ($225,067) for business-type activities represents the costs of the services, which ends up being paid from contributions provided by other governmental units to finance the Port Authority's economic development activity, investment earnings, miscellaneous receipts, and from the fund balance available at January 1. However, the Port Authority's business-type activities account for the operations of its ED Division and 2010 was the ED Division's first full-year of operations. Therefore, a reliance on operating grants and contributions from the ED Division's funding partners is expected at this time as it develops into a self-reliant enterprise. In addition. as mentioned previously, an indicator of whether the Port Authority's financial health is improving or deteriorating is its reliance on general receipts. In 2011, $242,075 of disbursements for business-type activities were supported through general receipts. Therefore, this decrease in 2012 from 2011 suggests improvement in the ED Division's financial condition.

The chart below illustrates the Port Authority's program specific receipts versus general receipts for 2012 and 2011 for business-type activities.

Business-Type Activities- General Receipts va. Progl'llm Specific Receipts

$400,000

$300,000

$200,000

$100,000

so Fiscal Year 2012 Fiscal YHr 2011

Port AuJhorlty Funds Analysis

The Port Authority uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The focus on the funds is to provide information on inflows, outflows, and balances of spendable resources. Such information is useful in assessing the Port Authomys financing requirements. In particular, unassigned (unreservedlundesignated) fund balances serve as a useful measure of the Port Authority's net resources available for spending at year-end. At December 31, 2012, the Port AuthorftYs General Fund Unassigned Cash Fund Balance was $515,733 as compared to $405,897 at December 31, 2011, a 27% increase. This increase portrays a significantly stronger cash position for the General Fund at December 31, 2012 than at December 31, 2011 .

The Port Authority had total cash receipts of $4,987,552 and total cash disbursements of $7,095,560 for all funds in 2012. Total governmental funds had cash receipts of $4.622,651 and cash disbursements of $6,727,0761n 2012.

The General Fund accounts for the general operations of the Port Authority, inclusive of all operations of the Aviation Division. Therefore, additional analysis of the General Fund Is presented in the following charts.

Western Reserve Port Authority, Ohio Management's Discussion and Analysis For the Year Ended December 31, 2012

Analysis of General Fund Receipts for 2012 and 2011

Fees and Charges for Services 1

Rental/Lease Income

Intergovernmental Receipts

Earnings on Investments

Proceeds from Debt

Other Receipts

Transfers and Advances

$0 $115,000

$408.911 $281,835

$103,483 $105,378

$387,164 $367.162

$1,038,421 $903,820

$0 $250,000 $500,000 $750,000 $1,000,000 $1,250,000

Fees and Charges for Services

RantaiiLeasa Income

Intergovernmental Receipts

Earnings on Investments

Proceeds from Dabt

Other Receipts

Transfers and Advances

52% 51% .

·5% 0% 5% 10%15%20%25%30%35%40%45%50%55%60%

112012 2011

•2012 2011

Western Reserve Port Authority, Ohio Management's Discussion and Analysis For the Year Ended December 31, 2012

For most of 2009 through 2011, the Port Authority operated in an extremely challenging economic environment, as did most public and private sector enterprises. As the economy improved in 2012, so followed the revenue streams of the Aviation Division, included as part of the General Fund. Total receipts of the General Fund, proceeds of debt notwithstanding, increased from $1,665,240 in 2011 to $1 ,994,566 in 2012, a 20% increase, primarily the result of 1) fees and charges for services receipts that increased from $281,835 in 2011 to $406,981 in 2012, a 44% Increase, 2) intergovernmental receipts that increased from $903,820 in 20i 1 to $1,036,421 in 2012, a 15% increase, and 3) other receipts that increased from $105,378 in 2011 to $163,493 in 2012, a 55% increase. A discussion of the components of the General Fund's receipts follows.

The increase in fees and charges for services receipts was primarily the result of 1) a significant increase in corporate and general aviation activity in 2012 as compared to recent years and 2) a 10% increase in commercial passenger activity in 2012 over 2011 . These two conditions increased FBO concessions, parking concessions, landing fees, and fuel flowage fees in 2012 from 2011 by approximately $49,327, $41,784,$15,345, and $11,678, respectively.

The increase In intergovernmental receipts was primarily the result of the Port Authority receiving 1 ) $602,360 in subsidies from Mahoning County in 2012 as compared to $542,898 in 2011, an 11% increase, and 2) $434,061 in subsidies from Trumbull County in 2012 as opposed to $341,341 In 2011, a 27% increase. These subsidies are derived from lodging excise taxes assessed by Mahoning and Trumbull Counties. Since the lodging industry usually follows the upward or downward trends of the national economy, Management anticipates that the amount of subsidies received from the Counties will continue to increase parallel with or slightly better than the economy.

The increase in other receipts was primarily the result of the Port Authority receiving In 2012 the return of a $53,750 deposit on the acquisition of an air cargo building.

Proceeds from debt decreased from $115,000 in 2011 to $0 In 2012, a 100% decrease. The Economic Development Fund issued in 2011 an $115,000 Bond Anticipation Note to the General Fund for the acquisition and installation of an access control system for the Airport's parking lot.

All other General Fund receipts remained moderately constant from 2011 to 2012.

Analysis of General Fund Disbursements for 2012 and 2011

Personal Services

Materials and Suppll•

ContriiCtual Services

Tt'bel

Utilities

Repairs and Maintenance

Capital Outlay

Debt Service

Other Disbursements

Transfers •d AdYIInces

$210.116 $221,101

$511.382 $315.581

$0 s1oo,ooo $200.000 $300,000 $40o,ooo $500,ooo seoo.ooo SToo,ooo

Personal Services

Mottorials and Supplies

Contractual Services

Travel

Utilities

Repairs and Maintenance

capital Outlay

Debt Service

Other Disbursements

Transfers and Advances

Western Reserve Port Authority, Ohio Management's Discussion and Analysis For the Year Ended December 31, 2012

6% 8%

30% 23%

30% 38%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

•2012 2011

Total disbursements of the General Fund increased from $1,591,298 in 2011 to $1,867,671 in 2012, a 17% increase, primarily the resutt of 1) personal services disbursements that decreased from $600,500 in 2011 to $569,460 in 2012, a 5% decrease, 2) materials and supplies disbursements that increased from $99,037 in 2011 to $117,013 in 2012, a 18% increase, 3) contractual services disbursements that increased from $365,581 rn 2011 to $561,362 in 2012, a 54% increase, 4) capital ouUay disbursements that decreased from $134,638 In 2011 to $105,906 in 2012, a 21% decrease, 5) other disbursements that inaeased from $17,136 in 2011 to $57A05 in 2012, a 235% increase, and 6) interfund transfers-out that increased from $59,918 in 2011 to $141,187 in 2012, a 226% increase. A discussion of the components of the General Fund's disbursements fotlows.

The decrease in personal services disbursements was primarily the result of 1) the elimination of a position in the Accounting and Business Manager's department in 2012, 2) a decrease in the costs of employee hearth care benefits in 2012 due to the abovementioned position elimination, and 3) a decrease in retirement system costs in 2012 due to the abovementioned position elimination. These three conditions decreased personal services disbursements in 2012 from 2011 by approximately $17,927, $9,799, and $3,782, respectively.

The increase In materials and supplies disbursements was primarily the result of 1) an increase in the cost of winter materials, such as liquid runway deicer, In 2012 by approximately $11,100 over 2011 due to extended periods of inclement weather in 2012 and 2) an increase in the costs of miscellaneous materials and supplies used during the performance of certain of the Airport's non-essential annual maintenance programs in 2012 by approximately $5,000 over 2011 .

The increase in contractual services disbursements was primarily the result of 1) an increase in engineering costs in 2012 over 2011 due to an increase in engineering services required for the Airport's East Side Development Project, 2) an increase In legal costs in 2012 over 2011 due to an Increased general need for professional legal services In 2012, 3) an increase in audit costs in 2012 over 2011 due to the timing of the performances and payments for the audi1S of the Port Authority's 201 0 and 2011 annual financial reports, and 4) an inaease in aviation consulting costs in 2012 over 2011 due to the Port Authority initiating in late 2011 an aggressive campaign to attract daily scheduled commercial air service by a major airline therein creating the need to have aviation consultants formulate presentations and proposals for Airport Management's discussions with the Airlines and to also represent and/or accompany Airport Management during its discussions with the Airtines and/or at Airline Conferences. These four conditions increased contractual services disbursements in 2012 from 2011 by approximately $17,672, $26,031, $16,016, and $72,856, respectively.

11--

Westem Reserve Port Authority, Ohio Management's Discussion and Analysis For the Year Ended December 31, 2012

The decrease in capital outlay was due to scheduling of capital improvement projects funded at 100% by the Airport.

The increase in other disbursements was primarily the result of the Port Authority making in 2012 a $53,750 deposit on the acquisHion of an air cargo building.

The increase In interfund transfers-out was the result of an additional $81,269 in matching funds the Port Authority was required to contribute from its General Fund Into Its Federal Airport Improvement Program in 2012 over 2011 due to scheduling of capital improvement projects funded at 90% by the Port Authority's Airport Improvement Program Federal Assistance Grants.

All other General Fund disbursements remained moderately constant from 2011 to 2012.

Capital Assets and Debt MmlnlstratJon

Capital Assets - The Port Authority does not currently maintain tracking of its capital assets and infrastructure although Management anticipates acquiring software to begin this performance in 2014. However, the Port Authority does maintain an Airport Capita/Improvement Plan and a 10-Year Master Plan that collectively are the primary planning tools for systematically identifying. prioritizing, and estimating costs for crttical development and associated capital needs of the Airport. In addition, the Airport Capital Improvement Plan presents the Airport's warranted and eligible capital assets and infrastructure needs as identified by the Airport's Sponsors, State of Ohio Aviation OfflclaJs, and the Federal Aviation Administration (FAA) and Is contained In the FAA's National Plan of Integrated Airport Systems. The 10-Year Master Plan Is available for viewing on the Port Authority's Website at www.vngairoort.com.

Capital Lease Obligations - The Port Authority financed the acquisition of a mower unit in 2008 through a leasing arrangement. This leasing arrangement meets the criteria of a capital lease as defined by FASB Statement No. 13 .. Accounting for Leases", which defines a capital lease as one that transfers benefits and risks of ownership to the lessee. Future payments collectively to satisfy this capital lease obligation are $977 due In 2013.

Debt Administration - The Port Authority's outstanding debt at December 31, 2012 for govemmental activities is $7,201,511, $5,160,639 principal and $2,040,872 interest, consisting of 1) $75,000 of principal remaining for a zero-percent interest, general obligation loan from Trumbull County received on February 12, 2004, that was utilized to assist the Port Authority in providing an operational security deposit to Vacation Express Airlines necessary for the Airlines to begin Its operations of providing direct commercial flights to Myrtle Beach, SC and to Orlando-Sanford Airport, FL, 2} $3,545,000 of principal remaining for 20-year Airport Development Revenue Bonds with various interest rates from 2.125% to 4.625% Issued in December 2011 to provide financial resources for the construction and/or improvement of Port Authority Airport facilities. Amounts needed to service this debt, including interest and fascal charges, approximately 55% will be derived from Passenger Facility Charges that are assessed to each enplaning commercial airline passenger as approved by the Federal Aviation Administration and approximately 45% will be derived from revenues (fees. charges, and rents} generated from facilities of which the construction and/or improvement thereof were financed by the proceeds of the Bonds, 3) $465,639 of principal remaining for a 10-year Development Revenue Bond, 2.84%, issued In 2012 to provide financial resources for the construction of a 14-unit T-Hangar. Amounts needed to service this debt, induding interest and fiscal charges, will be derived from rent generated from the T -Hangar, and 4) $1.075,000 of principal remaining for a 10-year Development Revenue Bond, 2.60%, issued in 2012 to provide financial resources for the acquisition of an air cargo building. Amounts needed to service this debt, including Interest and fiscal charges, will be derived from rent generated from the air cargo building.

J3

Western Reserve Port Authority, Ohio Management's Discussion and Analysis For the Year Ended December 31, 2012

The Port Authority's outstanding debt (principal and interest) at December 31, 2012 for business-type activities is $75,094,600, $6,394,060 in capital lease payments due to the Director of the Ohio Department of Development as related to the Timken Latrobe Steel Distribution Project, $3,095,263 in loan payments due to the Director of the Ohio Department of Development as related to the EXAL Corporation Project, $1,426,513 in loan payments due to the Summit County Port Authority as related to the EXAL Corporation Project, and $64,178,764 in loan payments due to the Director of the Ohio Department of Development as related to the Central Waste, Inc. Project. However, debt service obligations for the Tlmken, EXAL, and Central Waste, Inc. Projects are made directly from these companies to the trustees of such debt obligations and do not pass­through the Port Authority.

General Fund and Economic Deyeloament Fund Budaetlna Hlahllahts

The Port Authority's budget is prepared according to Ohio law and is based upon accounting for certain transactions on a basis of cash receipts, cash disbursements, and encumbrances (budgetary basis of accounting). The Statements of Receipts, Disbursements, and Changes in Fund Balances - Budget and Actual (Budget Basis), presents the Port Authority's estimated resources and appropriations for its major and non­major governmental funds and for Its Economic Development Fund (proprietary fund). Budgeting highlights for the operating funds of the Port Authority's two major Divisions follow:

The General Fund had final budgeted receipts of $1,853,401 while actual receipts were $1,994,566 for a positive variance of $141,165. The General Fund had final budgeted disbursements of $1,980,708 while actual disbursements were $1,922,949, for a positive variance of $57,759.

The Economic Development Fund had final budgeted receipts of $684,717 while actual receipts were $364,901 for a negative variance of $319,816. The negative variance was primarily the result of 1) $225,000 in subsidies from the ED Division's funding partners that were anticipated to be received In late 2012 but were not received until early 2013 and 2) project fees anticipated to be" received In 2012 but were not received until 2013 due to the timing of the closing of such projects. The Economic Development Fund had final budgeted disbursements of $381,000 while actual disbursements were $378,280 for a positive variance of $2,720.

Currant Issues

Aviation DMaion

Concurrent with the appointment of the Executive Director of Aviation in 2010 and recognizing that the Airport is underutlllzed, yet its non-terminal facilities are at occupancy capacity, the Port Authority formulated and began Implementing aggressively the following three Initiatives:

Commercial Air Service Development Initiative of which the goals and objectives are to attract additional leisure air service and dally regional business service to and from connecting hub airports. For the leisure and vacation traveling community, Republic Airways, DBA Frontier Airlines, is beginning charter "junker service in February 2013 to such destinations as Atlantic City, NJ, Tunica, MS, and New Orleans, LA. In addition, the Airport is receiving consideration from Allegiant Air for future flights to such destinations as Fort Lauderdale, FL, New York, NY, and to Las Vegas, NV, potentially as early as the third quarter of 2014. For the business traveling community, the Airport has met with several airlines interested In servicing the Airport to and from such conneCting hub airports as Washington-Dulles, Detroit-Metro, and Chicago O'Hare, potentially as early as the third quarter of 2014. In August 2012, the Department of Transportation awarded the Port Authority a $780,000 Small Community Air Service Development Program Grant to reestablish regularly scheduled commercial air service at the Airport to a hub of a major U.S. airline in the East, Midwest, or Southeast U.S .. This grant, in combination with an additional $420,000 In local cash contributions and $480,000 of in-kind services, will be used to develop an airline revenue guarantee program to support the first 12 months of such air service by mitigating the Initial business risk that a carrier will face in entering a newmarket.

· Ill

Westem Reserve Port Authority, Ohio Management's Discussion and Analysis For the Year Ended December 31, 2012

Corporate, General Aviation, and Other Aeronautical Development Initiative of which the goals and objectives are to satisfy present and anticipated demand for aeronautical facilities. Airport Management formulated a Plan for Development that, resultant of a multiphase process, identifies such demand and depicts proposed layouts of buildings, access, utilities, other necessary improvements, and a general use of land to accomplish the demand for the same. The first Project of the Plan for Development is the construction of the East Side Development Project, a designed I planned aircraft hangar and service facility development, for which the $1.7 mil Phase I of the Project was completed In 2012 and included the construction of the first of three14-unit T -Hangars.

In 2013, the Port Authority was awarded a $110,000 Appalachian Regional Commission Grant to replace the Airport Terminal sanitary sewer line and to provide the same S8fVice to the East Site Development Project. In November 2013, the Port Authority issued a $300,000 Development Revenue Bond for the construction of a wheeled-vehicle maintenance building, located within the East Site Development Project. An additional $1.6 mil is committed toward Phase II of the Project, which is scheduled to be completed by 2014, including the construction of the second 14-unlt T-Hangar. Design and engineering for the South Side Development Project, a planned aircraft hangar and service facility development, is scheduled for 2014 as well.

Air Cargo Development Initiative of which the goals and objectives are to establish domestic, national, and international air cargo and freight forwarding services at the Airport by Implementing a cooperative strategy, that includes the Airport as a regional air cargo facility, with regional freight fOI'Wal"ders, shippers, consignees, and air cargo airlines that currently ship signifiCallt cargo to I from the area via other airports, that will result in shipping cargo more efficiently and at a lower cost. As mentioned previously, the Port Authority issued in December 2012, a $1,075,000 In Development Revenue Bond for the acquisition of an existing air cargo building located on the Airport's Air Cargo Apron that will provide space to potential cargo facilitators.

Economic Development Division

Through 2012, the Port Authority obtained conduit debt financing In excess of $92,000,000 for economic development projects within Mahoning and Trumbull Counties. In July 2013, the Port Authority Issued $60,000,000 in development revenue bonds to provide financial resources to Beulah Park Gaming Ventures for Its construction of a racino entertainment complex and equipping and furnishing the same.

As 2012 was only the ED Division's third full-year of operations, the undertaking of other projects such as 1) assisting V&M Star with its $650 million pipe mill construction project by purchasing the former lndalex property In Girard and leasing it to V&M for storage of construction materials during construction, 2) working with Trumbull County to become the lead agency In a countywide redevelopment plan to Identify brownfield sites, and seeking state and federal funding for cleanup initiatives, and 3) spearheading a feasibility study to quantify how many business that could benefit from an lntermodal facility located in the community, provide testimony to the ED Division's abilities and value to the community. In 2013, the Port Authority was awarded a $600,000 U.S. Environmental Protection Agency Grant to assist with its brownfield sites Initiative.

Congctlna the Port Authorttv•s Manaaamtnt

This financial report is designed to provide our users, citizens, taxpayers, creditors, and all other Interested parties with a general overview of the Port Authority's finances and to reflect the Port Authority's accountability for the monies It receives. Questions concerning any of the information in this report or requests for additional Information should be directed to Ron Klingle, Chairman of the Board of Directors, Western Reserve Port Authority, Youngstown-Warren Regional Airport. 1453 Youngstown-Kingsville Road, NE, Vtenna, Ohio, 44473.

ATTACHMENT 4

603 Stanwix St Suite I 500, Pittsburgh P A 15222 Phone: 1-800-245-2718, Fax: 412-227-3736

www.indappr.com

Introductory Explanation

The Report is based on the original description of the property covered by our appraisal Contmct.

We have indicated the month and year of the most recent appraisals for the various classifications shown on the enclosed Report. The appmisal date appears to the right of the classification designation. However, in the case of reported changes, the appraisal dates will no1 appear. Changes will be included at your reported cost, and designated with an "X". The "X" represents unappraised value I items.

Buildings/structures physically appraised by the Industrial Appraisal Company after January I, 2006 will include several data elements ol eacb building/structure. Most of these are self-explanatory, such as the estimated year of construction, number of stories, and occupancy. The construction class information is based on the ISO (Insurance Service Office) code. These are identified as;

Class 1: Frame Construction Class 2: Joisted Masonry Class 3: Non Combustible

The frre alarm designations in the report are defrned as follows:

None: No fire alarm exists Local: Alarm sounds in captioned building only

Class 4: Masonry, Non Combustible Class 5: Modified Fire Resistant Class 6: Fire Resistant

Central: Alann sounds in captioned building and at a remote designated location (fire station, residence, etc.)

The square foot areas listed on the summary pertain only to buildings/structures physically appraised by the Industrial Appraisal Company. The total square foot area for all properties included in the Report and appraised by the Industrial Appraisal Company after January I, 2006 will be listed at the end of the summary. Buildings/Structures appraised prior to January I, 2006* and unappraised or reported buildings/structures will not have their square footage listed. (*This will not apply to some large risk pool clients or some diocesan clients.)

The Report is presented as a six column summary, arranged in well-defined property classifications and furnishes a disinterested and impartial statement of:

Cost of Reproduction new (Columns I, 2, 3) Sound Value (Columns 4, 5, 6)

The "Cost of Reproduction New" is defined as the cost to reproduce the entire property at one time, in new condition of like lcind and quality at current prices for material, labor, cost of freight and installation, contractor's overhead and profits, but without provision for overtime, bonuses, and premiums of any kind.

The "Sound Value" is defined as the Cost of Reproduction New less accrued depreciation resulting from observed conditions involving age, condition, utility, and remaining serviceable life.

The "Exclusions" set out in our Summary represent items that are usually excluded by the insurance policy and comprise of the following items: excavations and filling; portions of foundations which are below the undersurface of the lowest basement floor, or, where there is no basement, which are below the surface of the ground; and underground sewerage, piping, and wiring.

Certain items, such as articles containing gems, precious metals, antiques, fine arts (which include, among other things, art glass windows, murals, icons, iconostasis), organs, sacred vessels, vestments, articles of historical value, trophies, books, periodicals, and library volumes are not repriced.

Data Processing Equipment, due to rapid obsolescence factors and the pricing practices of manufacturers, is shown as a separate classification on the summary. This category is not repriced, but reflects the initial valuation and any reported changes. Software is not usually included; however, we will include it at your instruction. The Software classification will not be repriced.

Special arrangements for coverage of the above exceptions should be made with your insurance carrier or agent.

On receipt of this Report, we suggest that you call your insurance agent or broker and check the amount of insurance carried on the appraised property against the Inclusion Values shown in the Summary.

If your property is insured on the basis of Cost of Reproduction New (Replacement Costs) the values in Column 3 apply. If your insurance is based on Sound Values (Actual Cash Value) the values in Column 6 apply.

Should you have any questions regarding the age of your appraisal or the advisability of a reinspection, please contact either your District Representative or this office at the number listed above.

Form 54F 8-12

IMPORTANT NOTICE ABOUT THIS REPORT

The values contained in this Report have been determined on the basis of an operating unit and we do not assume any responsibility for matters of a legal nature and have not examined the title to or encumbrances on the properties included in the Report. We have made no investigation of and assume no responsibility for title to or liabilities against the properties appraised. We have no present or prospective interest in the property appraised nor is our compensation for this appraisal contingent in any way to the conclusions of value. Our estimates of value should be viewed as independently established, reasonable, true and correct to the best of our knowledge.

When reviewing this Report, it is important to keep in mind the date of the appraisal of the properties covered. As pointed out on our Certification, the Report is an office repricing in summary form and changes may have occurred that may not have been reported to us. Reinspections should be accomplished on a periodic basis to bring our files into agreement with the actual condition of the property and to include items not covered by the original appraisal.

These updated replacement cost estimates do not include any increase caused by a restriction or probation in any by-law, regulation, ordinance or law. They do not consider or include possible changes in local building codes, federal standards, or other legal restrictions. No value was assigned to the cost of demolition or the removal of debris should a loss occur. This appraisal update does not include land, additional value due to historical relevance, or landscaping.

Many insurance policies contain an "Amount of Insurance" clause- sometimes referred to as a "Stipulated Amount" or an "Agreed Amount" clause. These policies require the filing of a notarized statement of values each year. Failure to do so may revert the insurance coverage to a coinsurance basis.

Under the coinsurance clause, adjustment of insurance coverage must be made periodically or the insured runs the risk of coinsurance deductions at the time of a loss.

We suggest you have your insurance agent assist you in filing values and/or adjusting coverage as required by the terms of your insurance policy. Your annual appraisal protection service supplies some of the valuation data required for this purpose.

6-12

~ INDUSTRIAL APPRAISAL COMPANY .. INSURANCE SUMMARY

BUILDING OR UNIT

Western Reserve Port Authority 1453 YN6·Kingsvilla Rd Vienna OH 44473

VALUATION DATE 7/01/13

BLDG. 0101 YHG·Ter•inal

1453 YHG-Kingsvi11e Rd CITY : Vienna STATEs OH ZIP CODE: 44473 COUNTY: Tru•bull OCCUPANCY: Ter~inal COHST.YEARS: 1961·1941/1978/2000 CONSTRUCTION CLASS: 4 SUPER Sqft: 43,481 BASEMENT Sqft: 6,685 STORIES: 2 BUILD COND: Good EMERGENCY GEN: YES

BUILDING ARCHITECT FEES

TOTAL BUILDING

EQUIPMENT OFFICE FURN & FIXTURES OFFICE MACH & DEVICES EDP EQUIPMENT TELEPHONE SYSTEM COHHUHICATIONS EQUIPHE

TOTAL EQUIPMENT TOTAL

6/11

6/11 6/ll 6/11 6/11 6/11 6/ll

COST OF REPRODUCTION NEW

TOTAL I EXCLUSIONS I INCLUSIONS COLUMN 1 COLUMN 2 COLUMN 3

9,182,794 642.796

9,825,590

399,224 48,379 14,701 28,280 33,698

2,843 5271 125

10,352,715

322,368

322,368

322,368

8,860,426 642,796

9,503,222

399,224 48,379 14,701 28,280 33,698

2,843 527,125

10,030,347

SOUND VALUE

TOTAL 1 EXCLumoNs COLUMN 4 COLUMN 5

6,173,251 432,128

6,605,379

229,155 28,737 6,042

20,336 16,647 2,203

303,120 6,908,499

210,184

210,184

210,184

PLEASE READ INTRODl . . a.'ORY EXPLANATION

PAGE 1

8·356-500

INCLUSIONS COLUMN 6

5,963,067 432,128

6,395,195

229,155 28,737

6,042 20 , 336 16,647

2,203 303,120

6,698,315

~ BUH.DING OR UNIT

BLDG. 0102 YHG·Hanoar •1

145~ YNG·Kingsville Rd CITY: Vienna STATE: OH ZIP CODE: 44473 COUNTY: Tru•bull OCCUPANCY: Hangar COHST.YEARS: 1941 CONSTRUCTION CLASS: 4 SUPER SqFt: 29,737 STORIES: 1 BUILD COND: Average

BUILDING ARCHITECT FEES

TOTAL BUILDING TOTAL

BLDG. 0103 YNG·Hangar •z 1453 YNG-Kingsvi1ls Rd CITY: Vienna STATE: OH ZIP CODE: 44473 COUNTY: Tru~bull OCCUPANCY: Hangar CONST.YEARS: 1941 CONSTRUCTION CLASS: 4 SUPER SqFt: 17,740 STORIES: 1 BUILD COND: Good

BUILDING ARCHITECT FEES

TOTAL BUILDING TOTAL

INDUSTRIAL APPRAIS~ COMPANY- INSURANCE SUMMARY

COST OF REPRODUCTION NEW SOUND VALUE

TOTAL I EXCLUSIONS I INCLUSIONS COLUMN 1 I COLUMN 2 COLUMN 3

TOTAL I EXCLUSIONS COLUMN 4 COLUMN 5

6/11 2,653,712 64,336 2,5119,376 1,109,251 26,1192 185,760 185,760 77.6411

2,839,472 64,336 2,775,136 1,186,899 26,892 2.1139,472 64,336 2,775,136 1,186,1199 26,892

6/11 1,374,170 41,756 1,332,414 643,112 19.542 96,192 96,192 45,018

1,470,362 41,756 1,428,606 688,130 19,542 1,470,362 41,756 1,428,606 6118,130 19,542

PLEASE READ INTRODUCTORY EXPLANATION

PAGE 2

8-356-500

INCLUSIONS COLUMN 6

1,082,359 77,648

1,160' 007 1,160,007

623,570 45,018

668,588 668,588

~ BUll..DING OR UNIT

BLDG. 0104 YNG-Hangar •3

1453 YNG·Kin;sville Rd CITY1 Vienna STATE: OH ZIP CODE: 114473 COUNTY: Tru•bull OCCUPANCY: Hangar COHST.YEARS: 1941 COHSTRUCT[ON CLASS: 3 SUPER SqFt: 14,1165 STORIES: 1 BUILD COND: Good CENTRAL FIRE ALARM SYSTE":100

BUILDING 6/11 ARCHITECT FEES

TOTAL BUILDING TOTAL

BLDG. 0105 YNG-Hangar 14

1453 VNG·Kingsville Rd CITY: Vienna STATE: OH ZIP CODE: 44473 COUNTY: Tru•bull OCCUPANCY: Hangar CONST.VEARS: 1980 CONSTRUCTION CLASS: 3 SUPER SqFt: 11 '033 STORIES: 1 BUILD COND: Good

BUILDING 6/11 ARCHITECT FEES

TOTAL BUILDING TOTAL

INDUSTRIAL APPRAISAL COMPANY- INSURANCE SUMMARY

COSf OF REPRODUCTION NEW SOUND VALUE

TOTAL J EXCLUSIONS J INCLUSIONS COLUMN 1 COLUMN 2 COLUMN 3

TOTAL I EXCLUSIONS COLUMN 4 COLUMN 5

1,108,153 39,027 1,069,126 474,290 16,704 77,571 77,571 33,200

1,185,724 39,027 1.146,697 507,490 16,704 1.185,724 39,027 1,146,697 507,490 16,704

881,989 32,183 ....... I 539' 777 19,696 61,739 61,739 37,784

943,728 32,183 911,545 577,561 19,696 943,728 32,183 911,545 577,561 19,696

PLEASE READ INTRODL_.i.'ORY EXPLANATION

PAGE 3

11-356-500

INCLUSIONS COLUMN 6

457,586 33,200

490,7116 490,786

520,081 37,784

557,865 557,865

~ INDUSTRIAL APPRAISA....., COMPANY- INSURANCE SUMMARY

COST OF REPRODUCTION NEW SOUND VALUE BUILDING OR UNIT

TOTAL I EXCLUSIONS I INCLUSIONS COLUMN l COLUMN 2 COLUMN 3

TOTAL I EXCLUSIONS COLUMN 4 COLUMN 5

BLDG. 0106 YNG-H;tngar •5

145~ YNG-Kingsville Rd CITY: Vienna STATE: OH ZIP CODE: 41\473 COUNTY: Tru•bull OCCUPANCY: Hangar/Offices CONST.YEARS: 1980 CONSTRUCTION CLASS: 3 SUPER SqFt: 17,761\ STORIES: 1 BUILD COND: Good

BUILDING 6/11 1,375,538 46,998 1.328,540 841,829 28,763 ARCHITECT FEES 96,288 96,288 58,928

TOTAL BUILDING 1.471,826 46,998 1,424,828 900,757 28,763 TOTAL 1,471,826 46,998 1,424,828 900,757 28,763

BLDG. 0107 YNG-Maintenance Garage

1453 YNG-lingsvill• Rd CITY: Vienna STATE: OH ZIP CODE: 44473 COUNTY: Tru•bull OCCUPANCY: "aintanance Garage CONST.YEARS: 1992-2010 CONSTRUCTION CLASS: 3 SUPER SqFt: 9,515 STORIES: 1 BUILD COND: Good

BUILDING 6/11 I 858,339 34,577 82~.762 734,669 29,529 ARCHITECT FEES 60,084 60,084 51,427

TOTAL BUILDING 918,425 34,577 883,846 786,096 29,529

PLEASE READ INTRODUCTORY EXPLANATION

PAGE 4

8-356-500

INCLUSIONS COLUMN 6

813,066 58,928

871,994 871,994

705,140 51,427

756,567

~ BUILDING OR ~'IT

MACHINERY 6/11 EQUIPMENT 6/11 COMMUNICATIONS EQUIPHE 6/11 EQUIPMENT - AVG RETAIL 6/11 "OBILE EQUIPMENT 6/11

TOTAL EQUIPMENT TOTAL

BLDG. 0108 YHG-Tenant Maintenance Garage/Storage 1453 YNG-Kingsville Rd

CITY: Vienna STATE: OH ZIP CODE: 44~73

COUNTY: Trumbull OCCUPANCY: Garage/Storago CONST.YEARS: 1941 CONSTRUCTION CLASS: 2 SUPER SqFt: 4,879 STORIES: 1 BUILD COND: Average

BUILDING 6/11 ARCHITECT FEES

TOTAL BUILDING

MOBILE EQUIPMENT 6/11 EQUIPMENT-STATED VALUE 6/11

TOTAL EQUIPMENT TOTAL

A~bu ~ 1 v~~i

INDUSTRIAL APPRAISAL COMPANY- INSURANCE SUMMARY

COST OF REPRODUCTION NEW

TOTAL COLUMN 1

13,374 38,121 6,318

56,000 2,351,105 2,464,918 3,383,341

180,063 12,604

192,667

43,913 11,500 55,413

248,080

EXCLUSIONS COLUMN 2

34,577

8,412

8,412

8,412

INCLUSIONS COLUMN 3

13,37~

38,121 6,318

56,000 2,351,105 2,464,918 3,348,764

171,651 12,604

184,255

43,913 11,500 55,413

239,668

TOTAL COLUMN 4

7,650 18,832 3,007

56,000 1.779,786 1,865,275 2,651,371

62,662 4,386

67,048

25,470 11,500 36,970

104,018

PLEASE READ INTROD~ lORY EXPLANATION

SOUND VALUE

EXCLUSIONS COLUMN 5

29,529

2,927

2,927

2,927

PAGE 5

8-356-500

INCLUSIONS COLUMN 6

7,650 18,832

3,007 56,000

1,779,786 1,865,275 2,621,842

59,735 4,386

64,121

25,470 11,500 36,970

101,091

~ INDUSTRIAL APPRAISAL, COMPANY- INSURANCE SUMMARY

COSI' OF REPRODUCTION NEW SOUND VALUE BUILDING OR UNIT

TOTAL I EXCLUSIONS I INCLUSIONS COLUMN 1 COLUMN 2 COLUMN 3

TOTAL I EXCLUSIONS COLUMN 4 COLUMN 5

JLDG. 0109 YNG-T-Hangar T1/T6

1453 YNG-Kingsville Rd CITY: Vienna STATE: OH ZIP CODE: 44475 COUNTYr Tru•bu11 OCCUPANCY: T- Hangar CONST.YEARS: 1941 CONSTRUCTION CLASS: 3 SUPER SqFt: 5,188 STORIES: 1 IUILD COND: Poor

: IUILDING 6/11 212,844 6,241 206,596 67,615 1,987 ARCHITECT FEES 14,199 14,899 4.731

TOTAL IUILDING 227,743 6,241 221.495 72,423 1,917 TOTAL 227,743 6,248 221,495 72,423 1,987

ILDG. 0110 YNG-T•Hangar T7/T12 I I I

li 1453 YNG·K1ngsv11le Rd CITY: Vienna STATE: OH ZIP CODE1 44473 COUNTY: Tru•bu11 OCCUPANCY• T•Hanear l ,._r,

I I I COHST.YEARSr 1941

CONSTRUCTION CLASS: 3 ~ ~ I SUPER SqFt: 5,188 ~\ STORIES1 1 IUILD COND: Poor

BUILDING 6/11

I 212,844 6,241 ....... I 61,615 1,917

ARCHITECT FEES 14,899 14,899 4,738 TOTAL BUILDING 227,743 6,248 221,495 72,423 1,987

TOTAL 227,743 6,241 221,495 72,423 1,987

PLEASE READ INTRODUCTORY EXPLANATION

PAGE 6

8-356-500

INCLUSIONS COLUMN 6

65,698 4,731

70,436 70,436

65,691 4, 738

70,436 70,436

~ INDUSTRIAL APPRAISAL COMPANY- INSURANCE SUMMARY PAGE 1

8 · 356-500

COST OF REPRODUCTION NEW SOUND VALUE BUR.DING OR UNIT

TOTAL EXCLUSIONS INCLUSIONS TOTAL EXCLUSIONS INCLUSIONS

l COLUMN 1 COLUMN 2 COLUMN 3 COLUMN 4 COLUMN 5 COLUMN 6

I BLDG. 0111 YNG-Old Electrical Building 1453 YNG-lingsville Rd

CITY: Vienna STATE 1 OH J ZIP CODE: 44473 COUNTY: Tru•bull OCCUPANCY: Storaoe CONST.YEARS: 1941 CONSTRUCTION CLASS: 4 SUPER SqFt: 788 BASE"EMT SqFt: 560 STORIES ; 1 BUILD COND: Average

BUILDING 6.1'11 94,744 6,247 88,497 39,603 2,U1 36,992 ARCHITECT FEES 6,632 6,632 2,772 2,772

TOTAL BUILDING 101,376 6,247 95,129 42,375 2,611 39,764 TOTAL 101,376 6,247 95, 129 42,375 2,611 39, 764

BLDG. 0112 YNG-Rental Car Service

J Building 1453 YNG-Klngsville Rd

CITY1 Vienna STATE: OH ZIP CODE: 44473 COUNTY: Tru•bul1 OCCUPANCY ; Garage CONST.YEARS; 1950 CONSTRUCTION CLASS 1 2 SUPER SqFt1 827 STORIES; 1 BUILD COMD : Good

BUILDING 6/11 38,546 1 2,780 35,766 16,112 1,162 14,950 ARCHITECT FEES 2,691 ' 2,698 1,128 1,128

TOTAL BUILDING 41,244 1 2,780 38,464 17,240 1 , 162 16,078 TOTAL 41,244 2,780 38,464 17,240 1,162 16,078

l I I

PLEASE READ INTROD'L - . .L'ORY EXPLANATION

~ INDUSTRIAL APPRAIS~ COMPANY- INSURANCE SUMMARY

3UILDING OR UNIT

BLDG. 0113 YNG-Elaetrieal Vault lutldint 1453 YNG·lintsville Rd

CITY: Vhnna STATE: OH ZIP CODE: ct4473 COUNTY: Tru•bull OCCUPANCY: Electrical Controls CONST.YEARS: 2000 CONSTRUCTION CLASS: 4 SUPER SaFt: 2,371 STORIES: 1 BUILD COND: Good

BUILDING ARCHITECT FEES

TOTAL IUILDINS

MACHINERY MOillE EQUIPMENT EQUIP"EHT·STATED VALUE

TOTAL EQUIPMENT TOTAL

ILDG. 0114 YNG·Genarator Building

1453 YNG-~ingsvilla Rd CITY: Vienna STATE: OH ZIP CODE: 44473 COUNTY: Tru•bull OCCUPANCY: Generator CONST.YEARS: 2000 CONSTRUCTION CLASS• 2 SUPER SqFt: 230 STORIES: 1 BUILD COND: Good EHERGENCY GEN: YES

BUilDING ARCHITECT FEES

TOTAL BUILDING TOTAL

6111

6/11 6/11 6/11

6/11

COSI' OF REPRODUC110N NEW

TOTAL I EXCLUSIONS I INCLUSIONS COLUMN 1 COLUMN 2 COLUMN 3

516,439 36,151

552,590

21,062 47,389 2,500

70,951 623,541

182,344 12,764

195,108 195,108

10,403

10,403

10,403

1,642

1,642 1,642

506,036 36,151

542,187

21,062 47,389 2,500

70,951 613,131

180,702 12,764

193,466 193,466

SOUND VALUE

TOTAL 1 EXcLumoNs COLUMN 4 COLUMN 5

482,236 33,757

515,993

14,364 40,044

2,500 56,908

572,901

152,074 10,645

162,719 162,719

9,092

9,092

9,092

I ,369

1,369 1,369

PLEASE READ INTRODUCTORY EXPLANATION

PAGE 8

8-356•500

INCLUmONS COLUMN 6

473,144 33,757

506,901

14,$64 40,044

2,500 56,908

563,809

150,705 10,645

161,350 161,350

~ INDUSTRIAL APPRAISAL COMPANY - INSURANCE SUMMARY

BUlLDING OR UNIT

BLDG. 0115 YNG·Parking Attendants luildine 1455 YHG·lingsville Rd CITY1 Vienna STATEs OH ZIP CODE: 44475 COUNTY1 Tru•bull OCCUPANCY: Parking Attendant CONST.YEARS: 2000 CONSTRUCTION CLASS1 3 SUPER Sqft: 35 STORIES• 1 IUILD COHO: Good

BUILDING 6/11 TOTAl BUILDING

TOTAL

BLDG. 0196 YNG-Cargo Glycol Syst•• 1453 YNG-Kingsville Rd

ClTYr Vienna SlATE1 OH ZIP CODEr 44473 COUNTYs Tru•bull OCCUPANCY• Equip•ent Only

EQUIPMENT TOTAL EQUIPMENT

TOTAL

6/11

COS!' OF REPRODUCTION NEW

TOTAL I EXCLUSIONS I INCLUSIONS COLUMN 1 COLUMN 2 COLUMN 3

14,769 14,769 14,76!1

2,948,656 2,948,636 2,9tlfl,636

1,518 1,511 1,518

13,251 13,251 13,251

2,948,636 2,948,636 2,948,636

SOUND VALUE

TOTAL I EXCLUSIONS COLUMN 4 COLUMN 5

12,317 12,317 12,317

2,010,970 2,010,970 2,010,970

1,266 1,266 1;266

PLEASE READ INTROD~.. . _ .. 'ORY EXPLANATION

PAGE 9

8·356-500

INCLUSIONS COLUMN 6

11,051 11,051 11,051

2,010,970 2,010,970 2,010,970

~ INDUSTRIAL APPRAISAL ·COMPANY- INSURANCE SUMMARY

COST OF REPRODUCTION NEW SOUND VALUE BUILDING OR UNIT

TOTAL I EXCLUSIONS I INCLUSIONS COLUMN 1 COLUMN 2 COLUMN 3

TOTAL 1 EXCLumoNs COLUMN 4 COLUMN 5

BLDG. 0197 YNG-Ter•inal Apron Glycol Syste• 1453 YNG-Kingsville Rd

CITY: Vienna STATE: OH ZIP CODEa 44473 COUNTY: Tru•bull OCCUPANCY: EquipMent Only

EQUIPMENT 6/11

I 2,948,636 2,948,636 2,010,970

TOTAL EQUIPMENT 2,948,636 2,948,636 2.010,970 TOTAL 2,948,636 2,948,636 2,010,970

JLDG. 0198 YNG-Runway Liehtint

1455 YNG-lingsville Rd CITY: Vienna STATEa OH ZIP CODEa 44473 COUNTY: Tru•bull OCCUPANCY• Runway Lighting

INSURABLE PROPERTY IN THE OPEN 6/11 2,948.297 •••••••• 7 I 1,465,304

TOTAL BUILDING 2,948,297 2,948,297 1,465,304 TOTAL 2,948,297 2,948,297 1,465.304

JLDG. 0199 YNG-PITO

1453 YNG-lingsville Rd CITY r Vienna STATE: OH ZIP CODE: 44475 COUNTY: Tru•bull OCCUPANCY: Property in the Open

INSURABLE PROPERTY IN THE OPEN 6/ll I 3,121,336 I I 3,121,336 I 2,7111.110 I I TOTAL BUILDING 3,121,336 3,121,336 2,781,110

PLEASE READ INTRODUCTORY EXPLANATION

PAGE 10

8·356-500

INCLUSIONS COLUMN 6

2,010,970 2,010,970 2,010,970

1,465,304 1,465,30<4 1,465,304

2, 781,110 2,781,110

~ INDUSTRIAL APPRAISAL COMPANY- INSURANCE SUMMARY

BUILDING OR UNIT

MACHINERY EQUIPMENT MOilLE EQUIPMENT EQUIPMENT-STATED VALUE

TOTAL EQUIPMENT TOTAL

6/11 6/11 6/11 6/11

IUILDINii TOTAL ARCHITECT FEE TOTAL

GRAND TOTAL IUILDING

EQUIPMENT TOTAL GRAND TOTAL EQUIPMENT

GRAND TOTAL

GRAND TOTAL APPRAISED SQ. FOOTAGE: 165041

CrniTOF~ODOCTIONNEW

TOTAL I EXCLUSIONS I INCLUSIONS COLUMN 1 COLUMN 2 COLUMN 3

12,953 126,791 103,511

1,500 244,762

5,366,091

24,956,921 1,321,077

26,277,991

9,260,441 9,260,441

35,538,439

624.743

624,743

624,743

12,953 126,791 103,518

1,500 244,762

3,366,098

24,332,118 1,321,077

25,653,255

9,260,441 9,260,441

34,913,696

SOUND VALUE

TOTAL I EXCLUSIONS COLUMN 4 COLUMN 5

9,132 114,999 40,786

1,500 166,417

2,947,527

15,662,967 373,711 798,297

16,461,264 373.711

6,450,630 6,450,630

22,911,194 373,711

PLEASE READ INTROD'L .... 'ORY EXPLANATION

PAGE 11

8·356-500

INCLUSIONS COLUMN 6

9,132 114,999 40,786

1,500 166,417

2,947,527

15,289,256 798,297

16,087,553

6,450,630 6,450,630

22,538,183

PROOF OF LOSS SERVICE

In the event of a loss covered by insurance, provided immediate

written notice is given to our Home Office and our Annual Revaluation ·

Service is in effect. the Industrial Appraisal Company will provide

updated values, for preparation of proof of loss, of the appraised

property as of the date of the loss.

Industrial Apprafsai Company

Two Gateway Center

603 Stanwix Street

Suite 1500

Pittsburgh, PA 15222-9008

FORM NO. 770 CoPYiiRhl1975 lndvslriol Aoorcisal Comoonv

CERTIFICATE OF SERVICE

I hereby certify that a copy of the foregoing supplement, including all attachments, has been provided by email on August 28, 2014, to each of the following persons:

FAA Flight Standards District Office - Atlanta Attn: Bruce Clamp, POI 107 Charles Grant Parkway, Suite 301 Hapeville, Georgia 30354 alton. clamp@faa.gov

Dan Dickten, A.A.E. Executive Director of Aviation Youngstown-Warren Regional Airport 1453 Youngstown-Kingsville Road NE Vienna, Ohio 44473 ddickten@yngairport. com

Thomas J. Naughton, CEO Wayne County Airport Authority 1 Detroit Metro Airport Detroit, Michigan 48242 tom. naughton@wcaa. us

Michael Koester